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Inheritance tax warning as homeowners sitting on ‘ticking timebomb’ costing thousands | Personal Finance | Finance
Historic tax loopholes aimed at helping people reduce their inheritance tax (IHT) liabilities, could in fact cost people thousands, experts warn.
Tax law experts are calling for families with home loan schemes to “cut their losses” and “urgently” consider unwinding the complex trust set up, to get a tax refund and save their family thousands in double tax payments.
Experts explained that many families were persuaded into setting up elaborate trust structures with the aim of reducing their inheritance tax bills.
However, since pre-owned asset tax (POAT) came into force, what started as a tax-saving measure, turned into the regular payment of considerable income tax bills.
Plus, the inheritance tax position is still worse if the scheme is kept in place, rather than unwinding it.
Tax lawyers at law firm, Shakespeare Martineau explained the home loan schemes involved individuals (typically the parents) selling their house to one trust (“the house trust”) in return for an “IOU”. They then gifted the benefit of the IOU to a second trust (the debt trust”).
The parents were beneficiaries of the house trust which meant they were able to live there rent-free and, whilst the contents of the house trust technically fall into their estates for IHT purposes, the house trust only had nominal value due to the debt owed to the debt trust.
However, many families are warned they are sitting on a “ticking tax time bomb,” as POAT means people could be charged if they are living in a property that is part of a home loan scheme.
Rather than an inheritance tax, POAT is an income tax charge, which is calculated on the market rental value for the property.
With the rise in property rental prices, this means that some people could be regularly paying significant annual personal income tax bills, plus they’ll still have to pay IHT on your estate.
Julia Rosenbloom, tax partner at law firm, Shakespeare Martineau, said: “We are seeing more and more people fall foul of POAT charges and increased IHT liabilities as a result of having taken part in a home loan scheme. Tax schemes which they thought would save them money have ended up costing significant amounts in the long run.
“POAT charges can be considerable and it’s an extremely complicated field to navigate.”
POAT charges have been the focus of the Government and HMRC too, with cases brought before the courts, where people have claimed IHT relief when they have been paying POAT charges.
However, HMRC is being proactive in encouraging people to unwind their trust-based home loan schemes, allowing people to reclaim their POAT charges if they do so.
Ms Rosenbloom, continued: “A huge number of people will have been paying POAT charges over the years and the best bit of advice for anyone in this situation is to urgently start unpicking their schemes now.
“If you keep the structure in place, it will almost certainly be a nightmare to deal with for beneficiaries on death. Quirks with the way IHT is calculated mean that you’ll end up paying more in the long run.
“However, unpicking these schemes is easier said than done and breaking them down can lead to a lot of other issues around stamp duty, capital gains tax and income tax. Unwinding them needs care and the best advice really is to talk to an expert.
“Just to be clear, POAT charges aren’t only felt by the extremely wealthy. In the past, home loan schemes were targeted at the middle classes and at a time where the cost-of-living crisis is squeezing many families, saving money now and in the long run is extremely important.”
Elon Musk’s SpaceX has attracted over $250 billion in investor demand for its initial public offering (IPO), far above the $75 billion the company is aiming to raise, Reuters reported on Wednesday, citing sources privy to the development.
The IPO, seen as the world’s biggest-ever, has recorded subscription of four times the original ask. According to reports, wealth funds based in Saudi Arabia and Kuwait have placed orders ranging from $1 billion to $5 billion each.
According to Reuters, SpaceX is still in the middle of its marketing campaign. SpaceX President Gwynne Shotwell and finance head Bret Johnsen were scheduled to attend a lunch meeting with roughly 300 institutional investors on Tuesday at Morgan Stanley in downtown Manhattan, which was hosted by Morgan Stanley Co-President Dan Simkowitz, Reuters reported.
Rather than final allocations, which will be determined at pricing, subscription levels show indications of interest.
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In its roadshow presentation and IPO documents, SpaceX highlights the strength of its Starlink internet business as well as the distinctive character of its rocket-launching business, which it claims has been responsible for the majority of mass launched into orbit over the last three years.
Additionally, SpaceX highlighted a $23 trillion market potential, which the company linked to its artificial intelligence capabilities.
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India’s Outward FDI Slumps To $4.49 Billion In May As Equity Investments Tumble, RBI Data Shows
India’s total outward foreign direct investment commitments declined 49.02 per cent month-on-month to USD 4.49 billion in May 2026 from USD 8.84 billion, mainly due to lower equity investments, loans, and guarantees issued by Indian companies, according to RBI data.
However, total financial commitments by Indian entities under overseas investment increased 34.6 per cent year-on-year in May 2026 from USD 3.34 billion, data showed.
Equity investments abroad dropped sharply to USD 1,247.82 million in May from USD 3,537.35 million in April, marking a decline of about 64.72 per cent.
Overseas loans extended by Indian companies also declined to USD 632.12 million in May from USD 1,299.69 million in April.
Guarantees issued, which formed the largest component of overseas commitments, fell to USD 2,608.83 million in May from USD 3,999.79 million in April, declining around 35 per cent. However, it increased from USD 1,122.37 million in May 2025.
In the equity investment segment, Indovida India invested USD 673.2074 million abroad, Tata International of USD 130 million, Arvind Advanced Materials of USD 58 million, and ONGC Videsh Rovuma of USD 31.09 million, RBI data showed.
ALSO READ | RBI Permits Banks To Lend Only To SEBI-Registered REITs; 80% Cash Positive Assets Must
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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Gold At Rs 1.45 Lakh, Silver Below $60 Soon? Support Levels Slip As Inflation Stats Support Fed Hike Bets
Gold and silver prices are facing mounting pressure as rising US inflation, escalating geopolitical tensions in West Asia and growing expectations of a Federal Reserve rate hike weigh on investor sentiment. Analysts at Kotak Securities have revised key support levels lower for both precious metals, warning that silver could slip below the $60-per-ounce mark if selling pressure intensifies.
The outlook comes after gold extended its recent decline, falling around 2.3% to below $4,170 per ounce. According to Kotak Securities, the selloff was triggered by a sharp escalation in tensions between the United States and Iran following military exchanges near the Strait of Hormuz, a critical artery for global oil shipments.
US forces reportedly targeted Iranian positions after the downing of an American helicopter near Oman, while Iran responded with missile strikes on multiple US targets. The renewed conflict has heightened concerns about prolonged disruptions to global energy supplies and driven a fresh surge in crude oil prices.
At the same time, inflationary pressures in the United States have intensified. Data released by the Bureau of Labor Statistics showed consumer prices rose 4.2% in May from a year earlier, marking the strongest increase since early 2023. Core inflation, which excludes food and energy prices, rose 0.2% month-on-month and 2.9% annually.
ALSO READ: Gold, Silver ETFs Tumble Up To 5% As Bears Dominate Precious Metals Market
The inflation spike has led traders to reassess the Federal Reserve’s policy path. According to Kotak Securities, markets are increasingly pricing in the possibility that the US central bank may need to keep monetary policy restrictive for longer, with the CME FedWatch Tool indicating nearly a 75% probability of a rate hike by the end of the year.
For bullion investors, higher interest rates typically reduce the appeal of non-yielding assets such as gold and silver, contributing to downside pressure on prices.
Kotak Securities has revised its technical outlook for precious metals. Spot silver is expected to find support at $62.64, followed by $61.79 and $59.02, while resistance levels are placed at $65.41, $66.26 and $69.03. A break below the final support level could see silver trade below the $60 mark.
On MCX, Silver July futures have support at Rs 2,30,191, Rs 2,28,009 and Rs 2,20,947, while resistance is seen at Rs 2,37,253, Rs 2,39,435 and Rs 2,46,497.
For gold, spot prices have support at $4,125.5, $4,100.5 and $4,019.3. MCX Gold August futures are expected to find support at Rs 1,48,128, Rs 1,47,444 and Rs 1,45,230, with resistance at Rs 1,50,342, Rs 1,51,026 and Rs 1,53,240.
Adding to market uncertainty, US President Donald Trump warned Iran of “paying a price” for prolonged negotiations to end hostilities. His remarks pushed Brent crude above $93 a barrel, with analysts noting that any further military escalation could drive oil prices into the mid-$90s or higher. Elevated oil prices, in turn, could reinforce inflation concerns and strengthen the case for tighter monetary policy, creating additional headwinds for precious metals in the near term.
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