Charlotte Ledson Watson Ramsbottom SolicitorsGiving away assets is often a sound component of any Inheritance Tax (IHT) planning strategy. However, when the person who makes the gifts later goes bankrupt, a trustee appointed under the Insolvency Act 1986 has the power to ‘look back’ at transactions undertaken by the bankrupt and reclaim any assets which were passed on to avoid being taken into account in the bankruptcy or assets sold at less than market value.

Recently when a financial adviser went bankrupt, his trustee in bankruptcy attempted to bring back into the account gifts he had made for IHT planning purposes. However, the High Court would not allow the claim as the gifts had not been made in an attempt to defraud creditors and were also made more than five years before the man was made bankrupt. Claims are limited in these circumstances to transactions made in the previous five years.

If your estate is likely to be subject to IHT, the sooner you start your planning the better. We can advise on the best strategy for you and your family. Please get in touch with Charlotte Ledson on 01254 67 22 22 or complete our online enquiry form.

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