Many people will be concerned about the potential impact that leaving the EU will have on their personal financial and legal position. There is guidance available, although most of it is “wait and see”.
Those who may be concerned about their Will or trust, or the effect on inheritance tax (IHT), will be reassured by the fact that the law in this area is largely based on longstanding UK legislation and common law, which is unlikely to be affected by the disentangling of EU and domestic law.
During the EU referendum campaign we were faced with the prospect of an emergency Brexit budget and the suggestion that IHT might have to rise to 45% from 40%, the first rise since its introduction. Today, the new Chancellor has said that there will be no emergency budget so this prospect has receded for the time being.
Shares values fell immediately after the referendum result, and there have been anecdotal reports of falls in property values particularly in London. If shares and property values drop in the period between the date of someone’s death and the realization of the asset, then statutory provisions do exist that allow sale values to be substituted for a higher probate value within certain time limits and for a refund of IHT to be obtained.
If values fall back temporarily it can be a good time to consider estate planning. When someone dies within seven years of making a gift of an asset, IHT will be due and it will be the lower value at the date of the gift that will be used to calculate the IHT due, so any later growth in value is outside the donor’s estate.
For people who have assets in EU countries, the message is not to panic. It is business as usual at least for the next few years and there is no need to take any immediate action.