Five years ago my wife and I bought a wreck of a house in Italy, which is now fit to live in and worth £1m. We plan to sell our UK property and move to Italy with our five-year-old son and work for a UK company on a consultancy basis. When our son is old enough for secondary education we might take advantage of my wife and son's Australian passports and move "down under ". What will be the tax situation on the Italian property - could we establish it as our Principal Private Residence to avoid capital gains tax (CGT)?
Filippo Noseda, partner in the international wealth planning group at solicitors Withers, says that Italy does levy CGT, though there is an exemption for property owned for more than five years.
Therefore a future sale of your Italian property will not trigger any Italian CGT, while UK CGT on your Italian property will only be an issue if you remain resident in the UK (or if you come back to the UK within five years and have sold the property in the interim). You ask whether you could elect for Principal Primary Residence status for your Italian property. This is only an issue if you remain resident or ordinarily resident in the UK. Where an individual owns more than one property he may, within two years of acquiring the second, nominate one as his main residence. As you bought your Italian house five years ago, an election would be too late. If you sell your UK house now, your Italian house could qualify as your principal residence for the future so that part of the gain would be free of UK CGT if you subsequently sold it while UK resident.
With regard to inheritance tax, the bad news is that Italy reintroduced gift and succession tax at the end of last year. However, the good news is that your wife and son will benefit from an allowance of €1m each, with the balance being taxed at 4 per cent (plus stamp duty on the property). Assuming you are domiciled in the UK, you will continue to be subject to UK inheritance tax, unless you sell your property in the UK or unless you can show that Italy is the place with which your personal and economic relations are the closest. Your continuing to work for a UK company might be an issue, although it is not necessary to show that you have severed all your links with the UK.
How can I check if I am due a pension from previous employment/s? I'm not even sure some of the companies still exist - they may have been taken over - and what can I do about pension entitlements I should have been offered but wasn't?
Paul Burley, associate director at Smith & Williamson, the investment manager and accountancy group, says that if you don't know how to contact the companies directly you can trace previous employer pension scheme entitlements through the Pension Service which is part of the Department for Work and Pensions (DWP). It has a database of more than 200,000 occupational and personal pension schemes and can be used free of charge to search for a pension scheme you may be a member of.
The Pension Service will need as much information about the pension scheme and employer as you can provide: the full name and address of the employer who ran the occupational pension scheme; whether the employer has changed names, or was part of a larger group; the type of pension scheme you belonged to (for example, an occupational pension scheme, personal pension scheme or a group personal pension scheme); and when you belonged to this pension scheme. You can contact the Pension Service on 0845 6002 537 or online at www.thepensionservice.gov.uk and click on "pension tracing ".
Once you have traced the pension scheme, you will need to write to the scheme administrator with your details including your national insurance number. It should then be able to provide details of the benefits you are entitled to.
A good starting point for chasing up entitlements that weren't awarded would be the Pensions Advisory Service, which can be contacted on 0845 6012923 or www.pensionsadvisoryservice.org.uk.
My wife and I have been married for more than 30 years and have always had joint bank accounts. Our unmortgaged home is also in joint names. We want to give our children a lump sum, but were my wife or I to die within seven years, what would the inheritance tax (IHT) position be given the assets had been jointly held and given? Would the authorities treat the gifts on a 50:50 basis and tax accordingly?
Ian Luder, private client partner at Grant Thornton, says the first £3,000 of gifts made per donor in any tax year are exempt from IHT. If you make gifts to your children now and either of you die within seven years, then IHT would only be due on the excess over £3,000 to the extent that the nil-rate band (currently £300,000) is exceeded by such gifts.
If IHT is payable, "taper relief " may also be available to reduce any liability depending on the number of years that have passed since the gift/s.
The application of IHT in respect of joint accounts can be difficult. A gift out of your joint account wouldn't necessarily be treated as being split 50:50 between you and your wife.
If your home is held as joint tenants then this would be treated for IHT purposes as being held 50:50 and upon death the deceased's share would automatically pass to the survivor.
If you hold the property as tenants-in-common and gift a share to your children then the "gift with reservation " rules would apply if you continue to live in the house. In this case the property would remain in your estate for IHT purposes.
Care should also be taken to ensure you do not fall within the pre-owned assets legislation. This applies where a person makes a gift which they then benefit from at some point in the future. This could include a gift of cash now that is later used by the recipient to buy an asset which the original donor benefits from.