Cleansing relief meaning

Private Client England & Wales glossary A Abatement When, after settling the deceased’s funeral costs, debts and liabilities, the remaining estate cannot satisfy all legacies in full, the gifts are reduced accordingly, unless the Will shows a different intention. In a solvent estate, the order for reduction appears in Part II of Schedule 1 to the Administration of Estates Act 1925. Refer to Practice Note: Payment of legacies. Accruals basis Where income is taxed on an accruals basis, it is attributed to a given tax year by reference to the number of days within that year during which the activity giving rise to the liability accrued. See Practice Note: What is the basis of income tax?. Accumulation and maintenance (A&M) trust A form of non‑interest in possession trust designed to benefit children and young people up to 25, which received favourable inheritance tax treatment between 1975 and 2006. See Practice Note: Accumulation and maintenance trusts—IHT [Archived]. Accredited Legal Representative (ALR) ...

ARCHIVED: This archived Practice note addresses mixed funds in the context of the remittance basis. It reviews: the statutory meaning of ‘mixed fund’ in section 809Q(6) of the Income Tax Act 2007 when a movement from a mixed fund is treated as a transfer the steps for determining the make-up of a remittance (arising under Conditions A and B) drawn from a mixed fund STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime Finance Act 2025 (FA 2025), which obtained Royal Assent on 20 March 2025, introduces the abolition of the remittance basis of taxation and its replacement with a residence-based regime from 6 April 2025. FA 2025 also substitutes domicile as the key determinant of inheritance tax liability with residence. Additional reforms include revising the rules for excluded property status, removing protected settlements status for offshore trusts, and changes to overseas workday relief. For further information, see Practice Notes: The abolition of the remittance basis of...

Finance (No 2) Act 2017 (F(No 2)A 2017) ushered in a range of tax reforms affecting foreign domiciliaries, with substantial revisions to the treatment of offshore trusts. Key features included the creation of the ‘protected settlement’ concept and the related idea of ‘tainting’. This Practice Note highlights the core elements of the updated framework as it concerns settlors of offshore trusts nearing deemed domicile status under the 15-year rule, and their trustees. For further detail on deemed domicile, including the 15-year rule, see Practice Note: Deemed domicile for tax from 6 April 2017. Abolition of the remittance basis and introduction of a residence-based IHT regime from 6 April 2025 Finance Act 2025 (FA 2025), which received Royal Assent on 20 March 2025, legislates to remove the remittance basis of taxation and introduce a residence-based regime from 6 April 2025. FA 2025 also removes domicile as the key factor in determining liability to inheritance tax. Additional measures include changes to the rules that define excluded property status, the abolition...