The ever greater concentration of private wealth in the southeast has made a clear understanding of income tax and inheritance tax issues ever more important. John Bunker looks at the implications of the 2004 Budget and Finance Bill for high net worth individuals
In March this year, a new form of income tax, the preowned asset tax (POAT), was introduced via the Finance Bill. The new income tax charge will have huge consequences for inheritance tax (IHT) planning, reaching further than just obvious ‘tax avoidance schemes’. Since the Gifts with Reservation of Benefit (GWR) rules were introduced in 1986, ways have been sought to make lifetime gifts of assets without being caught by those rules. After the cases of Ingram v IRC  and IRC v Eversden  were overturned by a ‘one-off’ piece of legislation, this is a full-blown attack on ‘tax avoidance’.
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