Malcolm Finney looks at the complex provisions surrounding cash gifts, inheritance tax and pre-owned asset tax.
Inheritance tax (IHT) and the pre-owned asset tax (POAT) are intertwined and are some of the more complex legislative provisions.
The IHT provisions are primarily contained in IHTA 1984 and FA 1986, s 102, and the POAT provisions are contained in FA 2004, s 84 and Sch 15. POAT became effective on 6 April 2005 and was introduced to prevent avoidance of an IHT charge by use of one of several IHT avoidance schemes designed to avoid the reservation of benefit rules; it does so by subjecting the taxpayer to an annual income tax charge arising from disposals of land and chattels and intangible property held in a settlor-interested trust.
