Mark McLaughlin illustrates the importance of expressing intentions or wishes in writing for tax purposes.
When it comes to tax, attention to detail is all-important. So, retaining documentary evidence to support the reason why something has been done can make all the difference between a tax relief or allowance being allowed or not.
Ticking the boxes
For example, the inheritance tax (IHT) exemption for ‘normal expenditure out of income’ can apply if a donor’s gift satisfies certain conditions. These are broadly that the gift must: (a) be part of the donor’s normal expenditure; (b) be made out of income (taking one year with another); and (c) leave the donor with sufficient income to maintain their usual standard of living.
But what is ‘normal’ in this context? How can it be demonstrated? HM Revenue and Customs (HMRC)
