Tax planning and anti-avoidance

Question 1

What is tax avoidance/tax planning?

Answer 1

The efficient and lawful arrangements of a client’s affairs in a manner which minimizes their liability to tax.

Question 2

What is aggressive tax avoidance?

Answer 2

A form of tax avoidance which often involves the taxpayer entering into complex or artificial arrangements which have the overall effect of reducing their lax liability.

Question 3

What is tax evasion?

Answer 3

Where a taxpayer withholds information about assets or income, this is unlawful.

Question 4

Can loans made to acquire, maintain or enhance assets that qualify for BPR be deducted when calculating the death estate?

Answer 4

No, these must first be set against the value of the qualifying assets. If the loan exceeds the value of the relievable assets the remainder can be deducted from the value of the chargeable estate.

Question 5

Can unpaid loans be deducted when calculating the death estate?

Answer 5

No, loans are only deducted from the value of the estate at death if they are repaid from the estate. If not, it cannot be deducted from the estate.