This guidance note explains ‘home loan’ schemes and their variant ‘family debt’ schemes. These IHT planning schemes were popular in the early 2000s to remove the value of the main residence from the individual’s estate. The aim was to allow the property owner to remain living in the property without getting caught by the gift with reservation (GWR) provisions. Legislation introduced from 2003 began to progressively counter the tax benefits.
The creation of home loan schemes has not been a viable inheritance tax mitigation option for twenty years. However, tax practitioners will still encounter arrangements which were set up in the past. The guidance note provides background information on how the schemes worked and the current situation.
For other historic IHT planning schemes see the Historical schemes: Ingram and reversionary lease schemes guidance note and the Historical IHT scheme ― Eversden guidance note.
These schemes worked by means of two trusts as follows:
an individual would set up a trust in which
**Free trials are only available to individuals based in the UK, Ireland and selected UK overseas territories and Caribbean countries. We may terminate this trial at any time or decide not to give a trial, for any reason.
Taxation of dividend incomeIntroductionA dividend is a distribution of profit by a company to its shareholders.A dividend is not only a payment in cash. It can be the issue of new shares in exchange for forfeiting the right to a cash payment (a stock dividend). For more detail, see the Cash
Payments on account (POA)This guidance note provides and overview of the payments on account regime (POA). More in depth commentary can be found in De Voil Indirect Tax Service V5.110.What are payments on account?VAT registered businesses with an annual VAT liability of more than £2.3m are required
Temporary differencesCalculation of temporary differencesThe temporary difference arising in respect of an asset or liability is calculated by comparing the carrying value of that asset or liability with its tax base.IAS 12 uses the concept of taxable or deductible temporary differences. Whether a