Exempt transfer meaning

Trustees Verify who the present charity trustees are. Examine historic appointment and retirement deeds to validate earlier changes to the board. Consider whether any current trustees have obvious conflicts of interest. Trust instrument Review the trust instrument and identify the powers it grants. Record any express limits on exercising those powers. Note whether any of the charity’s land is functional, designated, or held in specie. Land and leases Identify the charity’s property holdings and carry out the following checks: Confirm that title to all land is current, checking whether required deeds or transfers were executed after trustee changes, or reliance is placed on statutory vesting; verify proper execution of all documents. Confirm that appropriate restrictions have been entered on the title register. Confirm, so far as possible, that the land was duly authorised on acquisition, and review every lease where the charity is landlord or tenant; note any onerous obligations, and check whether required notices were served after...

What are the practical implications of this case? The central question on this appeal was whether the pension drawdowns were ‘paid in consideration of employment’. HMRC argued that moving occupational pension entitlements to a SIPP, essentially an investment product that does not require employment as a condition, severed the necessary link to the original employment and meant the pension could be taxed in the UK. As many of the UK’s DTCs with other jurisdictions include wording similar to the UK–Portugal DTC, the outcome may have significant consequences for expats whose situations resemble that of the appellant. The First-tier Tribunal Tax (FTT) offers helpful clarification of the principles to be applied when deciding whether there is a sufficiently strong connection between an expat’s pension withdrawals and their former employment in such cases...

In this issue: Wills Court of Protection UK taxes for Private Client HMRC Manuals updates Tax avoidance, evasion and non-compliance Budgets and Finance Bills Contentious trusts and estates Pensions, insurance and tax efficient investments International Question of the week Additional Private Client updates this week Daily and weekly news alerts LexTalk®Private Client: a Lexis+® community New and updated content Dates for your diary Trackers Useful information Wills Llamas, legacies, and legalities—does a gift in a Will fail if the charity ceases to exist? (British Camelids Ltd v Brooke Hospital for Animals) Animal-loving conservationist Candia Midworth, who kept llamas on her Surrey farm, directed that her £1.9m estate be shared equally among a number of animal charities. By the date of her death on 8 April 2022, some of those charities had either passed their functions to successor bodies or disappeared entirely. British Camelids Ltd, as claimants,...

See Q&A: What are the specific conditions under which a payment to settle a contested claim to an estate is treated as a potentially exempt transfer? It is assumed that proceedings have been commenced under the Inheritance (Provision for Family and Dependants) Act 1975 (I(PFD)A 1975). The tax position of any payment made by A to B will hinge on all the surrounding circumstances. For further detail on claims brought under the Inheritance (Provision for Family and Dependants) Act 1975 (I(PFD)A 1975), see Practice Note: Family provision claims—settlement and taxation. The basic position is that an order made pursuant to I(PFD)A...

Before disposing of a business or trade When planning a disposal, a corporate seller must choose the most suitable deal structure. Commercial drivers should lead, yet securing a tax-efficient outcome will inevitably be a key concern. The initial choice is whether to transfer: the business and its underlying assets (a business sale), or the shares in a subsidiary that holds the business and assets (a share sale) Broadly, sellers tend to prefer a share sale: it offers a straightforward exit and, where the substantial shareholdings exemption (SSE) applies, any gain is exempt from tax. An asset deal is more likely to crystallise tax charges and leaves any pre-completion tax liabilities with the seller. This Practice Note does not address individual sellers or business asset disposal relief (BADR). For more on BADR, see Practice Note: CGT—business asset disposal relief (formerly entrepreneurs' relief)...

Capital reduction demergers Why a company may undertake a demerger, and the alternative ways such a split can be structured, are explained in Practice Notes: Demergers—an introduction to the tax issues and Demergers—an introduction for corporate lawyers. More detailed Practice Notes examine the tax implications associated with the main demerger routes, namely: statutory (or dividend) demergers, whether direct or indirect—see Practice Note: Statutory demergers liquidation demergers—see Practice Note: Liquidation demergers capital reduction demergers—the focus of this Practice Note In a capital reduction demerger, the top company of the target group reduces its capital; in consideration, the demerged business is moved to a new holding company, which then issues shares to the shareholders. Unlike a statutory demerger, a capital reduction demerger does not benefit from the specific tax reliefs available for exempt distributions. Even so, it can be implemented so that it does not give rise to tax charges—on income or on capital—for the shareholders or for any of...

FORTHCOMING CHANGE relating to the modernisation of stamp taxes on shares framework: From 2027, stamp duty and SDRT will be replaced by a single, self-assessed tax on securities—the securities transfer charge (STC)—which will be paid and reported via a new online portal. The STC’s features will largely reflect the proposals for that tax set out in the 2023 consultation. Finance Bill 2026 (FB 2026) provides a power, commencing on Royal Assent, to introduce secondary legislation so taxpayers can pilot the digital service by self-assessing their stamp taxes on securities liabilities and submitting transactions electronically. For more on the modernisation of stamp taxes on securities, see: News Analyses: Budget 2025—Tax analysis—Stamp and transfer taxes Tax update spring 2025—Stamp taxes on shares modernisation Tax update spring 2025—Tax analysis—Stamp and transfer taxes TAMD 2023—Stamp taxes on shares modernisation TAMD 2023—consultation—stamp taxes on shares Tax Administration and Maintenance Day—27 April 2023—Stamp and transfer taxes...

Section 2 of the Landlord and Tenant Act 1987 (LTA 1987) Section 2 of the Landlord and Tenant Act 1987 (LTA 1987) states that a person is the landlord if they are (a) the direct landlord of the qualifying tenants of flats in the premises, or (b) where any such tenant is a statutory tenant, the person who, but for that statutory tenancy, would have the right to possession of the flat. Consequently, the relevant landlord is usually the immediate landlord of the qualifying tenants, so a transfer of a superior interest is generally outside scope. Intermediate headleases are often used to avoid the regime. However, s 2(2) LTA 1987 provides that where the immediate landlord is also a tenant of the premises under a tenancy that is either: a term under seven years, or a term exceeding seven years, but capable of termination within the first seven years at the superior landlord’s option, the superior landlord is also treated as the...

It has been assumed that: A’s entitlement under the trust to a 50% interest in the property constitutes a qualifying interest in possession (QIIP) A’s trust interest is not within section 5(1B) of the Inheritance Tax Act 1984 (IHTA 1984) Releasing A’s interest in possession will bring the trust to an end B is not a settlor of the trust The cessation of the QIIP, together with A’s gift of the remaining 50% share, each amounts to a potentially exempt transfer (PET) by A. These transfers become chargeable to IHT if A were to die within seven years. See Practice Note: Qualifying interest in possession trusts—IHT treatment, especially the section ‘Ending of an interest in possession during beneficiary’s lifetime’. Taper relief, as well as A’s available nil rate band, may operate to lessen any IHT payable...

Inheritance tax (IHT) treatment of the loan The IHT consequences for a loan turn on its precise wording and conditions, such as whether the borrowing is secured. You should also review the lender’s Will, in case the testamentary provisions discharge the liability. In practice, the difference between classifying the loan as an asset of the estate on death or as a failed potentially exempt transfer immediately before death may, in some cases, make no difference to the IHT due. To reach the correct analysis, the language of sections 4 and 3A of the Inheritance Tax Act 1984 (IHTA 1984) must be considered. In particular, section 4 (transfers on death) provides that IHT applies as though, immediately prior to death, the deceased had made a transfer of value—i.e. a deemed transfer immediately before death that triggers the IHT charge...