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    • lesleymarr
    • By lesleymarr 29th Jun 17, 1:08 PM
    • 50 Posts
    • 13 Thanks
    lesleymarr
    BTW the confidence some of you guys have in solicitors!
    I have employed some stinkers. A friend of mine (a trainee solicitor) commented on my really bad luck with solicitors. I replied, why would I go out of my way to employ bad solicitors?. We agreed that a personal recomendation from friends or neighbours was of little value since most people only employ one solicitor and can only comment on that one, it's not like they are comparing shops or any item they have a lot of experience of. The website 'solicitors from hell' has been taken down because the owner was threatened with legal action. Tripadvisor isn't taken down because lots of people dislike a particular hotel.
    For example, when I buy a garage, if the seller and I do our own conveyancing it costs me £40 to change the Land Register and whatever we pay for an ID1 (maybe £5? each) and takes 2 weeks. Last garage I bought using a solictor, it took nearly 6 months. The solicitor wrote the wrong address for me on the title deed. I complained, and got a refund.
    • lesleymarr
    • By lesleymarr 29th Jun 17, 1:31 PM
    • 50 Posts
    • 13 Thanks
    lesleymarr
    You are fortunate in that your house has increased in value quite dramatically. That's not down to anything you've done. Why shouldn't your estate pay some tax on your windfall?

    Your brother could be thinking "My sister's so lucky - her house isn't as big as mine but it's worth £1m."

    You could sell up now, buy something out of London and still have enough left to give your daughter enough money to buy her own property.
    Originally posted by Mojisola
    As I explained, my daughter will have to sell the house to pay IHT. If I sell up and move out, she will pay IHT on the gift I give her to buy somewhere else. As I can give her £3000 a year I will have to live for 260 more years to give her a million free of IHT. We are not that long-lived in my family.
    • Mojisola
    • By Mojisola 29th Jun 17, 1:44 PM
    • 27,804 Posts
    • 70,618 Thanks
    Mojisola
    As I explained, my daughter will have to sell the house to pay IHT.

    If I sell up and move out, she will pay IHT on the gift I give her to buy somewhere else.
    Originally posted by lesleymarr
    She'd only pay the full IHT if you died very soon after giving her the money.

    If you can make it past seven years, there'll be nothing to pay.

    www.gov.uk/inheritance-tax/gifts
    • Savvy_Sue
    • By Savvy_Sue 30th Jun 17, 1:49 AM
    • 37,484 Posts
    • 33,793 Thanks
    Savvy_Sue
    She'd only pay the full IHT if you died very soon after giving her the money.

    If you can make it past seven years, there'll be nothing to pay.

    www.gov.uk/inheritance-tax/gifts
    Originally posted by Mojisola
    There is an alternative: I've just googled 'insurance policy to pay IHT'.
    Still knitting!
    Completed: 1 adult cardigan, 3 baby jumpers, 1 shawl, 2 pairs baby bootees,
    1 Wise Man Knitivity figure, 1 sock ...
    Current projects: 1 shawl, t'other sock (just about to turn the heel!)
    • getmore4less
    • By getmore4less 30th Jun 17, 7:57 AM
    • 29,115 Posts
    • 17,411 Thanks
    getmore4less
    As I explained, my daughter will have to sell the house to pay IHT. If I sell up and move out, she will pay IHT on the gift I give her to buy somewhere else. As I can give her £3000 a year I will have to live for 260 more years to give her a million free of IHT. We are not that long-lived in my family.
    Originally posted by lesleymarr
    WIth such a basic missunderstanding of how IHT works you have no hope of getting things anywhere near right.

    You can gift as much as you like,
    7 years it is IHT free.
    if over your nil rate band (£325k and up to £1m in a few years if a dead spouse) then taper relief kicks in at year 3.

    There is a lot of scope for IHT planning if you can afford to gift some away, with a Gift Inter Vivos life assurance policy you can protect the gift(s) from IHT completely.
    Last edited by getmore4less; 30-06-2017 at 8:01 AM.
    • Keep pedalling
    • By Keep pedalling 30th Jun 17, 1:29 PM
    • 3,259 Posts
    • 3,467 Thanks
    Keep pedalling
    As I explained, my daughter will have to sell the house to pay IHT. If I sell up and move out, she will pay IHT on the gift I give her to buy somewhere else. As I can give her £3000 a year I will have to live for 260 more years to give her a million free of IHT. We are not that long-lived in my family.
    Originally posted by lesleymarr
    Sorry, but unless you are going to give everything you own away and die within 7 years that is nonsense.

    Spend a tiny part of your considerable wealth on some professional advice from an IFA about estate planning.
    • purple haze
    • By purple haze 30th Jun 17, 2:25 PM
    • 61 Posts
    • 69 Thanks
    purple haze
    From a purely tax planning perspective (and assuming your daughter lives with you and intends to continue to do so) the obvious step to take would be to transfer half your house to your daughter.

    This would be a potentially exempt transfer rather than a gift with a reservation of benefit by virtue of s102B Finance Act 1986 and providing you survived for 7 years half the value of the house would be removed from your estate for inheritance tax purposes.
    • T81 madlizzy
    • By T81 madlizzy 7th Jul 17, 10:27 PM
    • 7 Posts
    • 3 Thanks
    T81 madlizzy
    I would like to explore the forums thoughts on my inlaws situation
    There are two children to benefit from the potential estate.
    Currently own their own house 500k
    But also own deceased mothers house having transfered ownership 20 yes ago now worth 200k. Rental income 6k
    Have some savings and good pension incomes.
    Late 70s but in various good health currently
    What are the options to start considering shelter from iht or indeed CGT if the sell to begin gifting?
    Many thanks
    Martin
    • xylophone
    • By xylophone 7th Jul 17, 11:51 PM
    • 21,958 Posts
    • 12,659 Thanks
    xylophone
    https://www.gov.uk/government/publications/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band
    • Keep pedalling
    • By Keep pedalling 8th Jul 17, 6:18 PM
    • 3,259 Posts
    • 3,467 Thanks
    Keep pedalling
    If their savings are below £300k then they don't really have much to worry about regards IHT as their combined nil rate band and primary residence nil rate is currently £850k rising to £1M over the next few years.

    The only way to avoid CGT is to make sure you never sell or give away the rented property.

    If they are close to going into IHT territory they should take advantage of their £3000 annual allowance. If they have not made such gifts in the last financial year between them they can gift £12 this year and £6k in subsequent years.
    • T81 madlizzy
    • By T81 madlizzy 8th Jul 17, 9:14 PM
    • 7 Posts
    • 3 Thanks
    T81 madlizzy
    Keep pedalling, thank you for your reply
    Just to clarify, they each have an IHT allowances to 'hand down' rather then each daughter having a limit to receive? How much is that?
    Is that amount able to include the 2nd property rental/inheretance they own?
    What happens to the main residence if it passed to one spouse first? They are TIC by the way
    Thanks in advance
    Martin
    • Keep pedalling
    • By Keep pedalling 8th Jul 17, 9:41 PM
    • 3,259 Posts
    • 3,467 Thanks
    Keep pedalling
    Keep pedalling, thank you for your reply
    Just to clarify, they each have an IHT allowances to 'hand down' rather then each daughter having a limit to receive? How much is that?
    Is that amount able to include the 2nd property rental/inheretance they own?
    What happens to the main residence if it passed to one spouse first? They are TIC by the way
    Thanks in advance
    Martin
    Originally posted by T81 madlizzy
    Each of them has a £325k nil rate band, and providing the estate is left to their direct descendants a £100k primary residence allowance (which will rise to £175k over the next few years)

    If the first to die leaves everything to their spouse, then none of those allowances will have been used, and can be transfered to the spouse's estate on their death. If both were to die this financial year then the total that can be passed on tax free is £850k, if one died this year and the other some time after April 5th 2020 then the tax free amount will be £1M.

    The rented property would be treated as just another asset, the same way as savings, shares etc. The main tax issue with that property comes if it needs to be sold for some reason where after all that time there willl very likely to be a capital gains tax issue.

    This of cause assumes a future government does not change the rules in the mean time.
    • hullfiona
    • By hullfiona 17th Jul 17, 9:24 PM
    • 10 Posts
    • 7 Thanks
    hullfiona
    Hello, i live with my long term partner but we are not married, we have flat which we own jointly and is rented out as an investment. My partner owns the house we live in and its in his name alone, there is no mortgage on either property.

    My partner wants to make sure that I get everything when he dies and we are making wills (leaving everything to each other as we don't have any kids) However we are worried about IHT as his house is probably worth about £500k.

    One thought that we have is just getting married, would this solve the IHT issue, if so it seems pretty simple and cheap, cheap is important as we have a very low income.
    • getmore4less
    • By getmore4less 17th Jul 17, 9:45 PM
    • 29,115 Posts
    • 17,411 Thanks
    getmore4less
    Hello, i live with my long term partner but we are not married, we have flat which we own jointly and is rented out as an investment. My partner owns the house we live in and its in his name alone, there is no mortgage on either property.

    My partner wants to make sure that I get everything when he dies and we are making wills (leaving everything to each other as we don't have any kids) However we are worried about IHT as his house is probably worth about £500k.

    One thought that we have is just getting married, would this solve the IHT issue, if so it seems pretty simple and cheap, cheap is important as we have a very low income.
    Originally posted by hullfiona
    that will solve a lot of issues but potentially not all of them.

    Whats the total asset base of both of you.
    • hullfiona
    • By hullfiona 17th Jul 17, 9:54 PM
    • 10 Posts
    • 7 Thanks
    hullfiona
    that will solve a lot of issues but potentially not all of them.

    Whats the total asset base of both of you.
    Originally posted by getmore4less
    Estimated max is £8-900k including both properties and savings etc.
    • Keep pedalling
    • By Keep pedalling 17th Jul 17, 10:02 PM
    • 3,259 Posts
    • 3,467 Thanks
    Keep pedalling
    Getting married would get rid of any IHT issues for the partner surviving the first death, so well worth doing. Still need wills to cover the second death and the possibility of you going together. If you have charities you are fond of you can use those can be used to avoid tax with the second death.
    • WiseOldOak
    • By WiseOldOak 17th Jul 17, 10:14 PM
    • 2 Posts
    • 0 Thanks
    WiseOldOak
    Save4ArainyDay -£20k for Discretionary Trust!!
    £20,000?..... Hopefully your parents have not gone ahead with this yet? What was the reason for your parents wanting to set up a discretionary trust in the first place? If it was JUST to minimise IHT, and their total estate is around £400,000, they do not even come anywhere near having to pay any IHT so this trust will be a total waste of their money unless of course they prefer to give that money to Lloyds instead of their beneficiaries?!

    If a property is involved and it's being handed down to direct descendants, their estate will need to be worth over £850,000 before any IHT becomes due (rising to £1m by 2020). Even if it's not involving a property, their total estate would need to be worth over £650,000 before any IHT would become due. So, based on what you have said, they do not even have an IHT liability.

    Banks are notorious for doing this! Unless there was a very good other reason, I can see no need for a trust to be set up during their lifetime on an estate of this size. I would definitely suggest seeing a reputable Will Writer or a Solicitor who will advise them according to their estate, needs and what they are looking to achieve. At most, I would think they would need a 'property trust' (to protect inheritance of the family home) written into new Mirror Wills and to split the tenancy on their property (if not done so already so that they own 50% each), this would be set up as a Will Trust which only comes into force on 1st death and requires little or no maintenance until the 2nd death. (Depending on where you live this should cost no more than £600 at most).

    The other important thing I stronly suggest is that they make Lasting Powers of Attorney so that each other and the people they choose as their attorneys can legally take care of their affairs (Health and Welfare and Property and Finance - one of each for both parents) if they are unable to do so for themselves either temporarily or permanently. It is impossible to get anyone to deal with you for anything these days if you are not the account holder due to Data Protection laws and without this express legal permission, it's a nightmare. If one passed away and the other needed to go into care, the attorneys could choose to rent the property to pay towards care costs and protect the home so that it can ultimately be inherited, without the Power of Attorney, this would be virtually impossible and cost a fortune. This should cost no more than around £2,000 (for all 4 including the court fees to register them) - but worth every penny if they are needed. (look up 'Heather Bateman story' and that will explain more) I hope that helps, good luck!



    My parents sought help with IHT from their Bank (Lloyds). They are under the impression that the cost is £20000 with an annual maintenance fee of £500 to set up and maintain a Discretionary Inheritance Trust. I am guessing that their total estate would not be valued at more than £400,000.
    £20K???? This cannot be right.
    Can anyone give me an estimate of what the costs are likely to be so that I can advise my parents.
    I would like them to see a Tax Specialist rather than their Solicitor because their chap is a a good all rounder when it comes to house conveyancing etc but is not a specialist when it comes to tax.
    All help much appreciated
    Originally posted by Save4ArainyDay
    Last edited by WiseOldOak; 17-07-2017 at 10:18 PM.
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