inheritance tax

hardpressed

Not wishing to pry but if you are a widow any unused inheritance tax allowance from you husband passes to you.

seven-day-weekend

Prenuptial agreements have no legal status in the UK.

Just stop to think what could happen if you give your daughter half your house:

If she marries and divorces her husband will be entitled to a share (would the house have to be sold to pay it?).

If she gets into debt and goes bankrupt the equity in her half of the house will be taken into consideration (same question as before).

If she marries and brings her husband to live in her house (which she is quite entitled to do), how would you feel about that?

Plus the things to do with tax that the others have mentioned.

Not a good idea really, especially at your comparatively young age. We were thinking of doing the same with our son, but our solicitor talked us out of it.

EdInvestor

exbankchick wrote: »

I'll revise my question! As a single parent with a house that peaked at possibly 500.000 (tho' now probably 350,000) & an only child, is there any way I can minimize her inheritance tax?

IHT bands are increased every year and of course house prices are faling, so by next April it's likely that if your estate consists only of the house then it will be within the nil rate band. Problem solved.

A more problematic issue might be paying the costs of long term care if needed, which can quickly eat up money. Check into "immediate needs annuities" as an alternative which would leave most of the money intact.

sleepless_saver

The IHT due would not be enough for most people to worry about making complicated and risky arrangments for. If you died tomorrow with your only asset a house worth £350k, then the IHT liable would be 40% of £350-£314K the current threshold - less than £15k.

At 65 in good health, average female life expectancy is coming on for 20 years. You may well need (or want) the equity you have in your house for yourself, to maintain your standard of living and to help pay for care should you need it.

CLAPTON

exbankchick wrote: »

As a single parent with a house that peaked at possibly 500,000 (tho' now probably 350,000) & an only daughter, would it make sense for me to gift her half the house & hope to live another seven years? I would also insist she set up a pre-nuptial agreement before marriage, tho' would this be any safeguard at all? Thanku
I'll revise my question! As a single parent with a house that peaked at possibly 500.000 (tho' now probably 350,000) & an only child, is there any way I can minimize her inheritance tax?

yes

-you can survive until / if/ when the conservatives get into power... they have promised to raise the IHT allowance to one million

-and / or survive for a few more months... houses will have halved in value so there will be no IHT to pay.

honestly at your (young) age there is little you can sensibly do.. you have at least 20-30 years of living to do..

margaretclare

sleepless_saver wrote: »

The IHT due would not be enough for most people to worry about making complicated and risky arrangments for. If you died tomorrow with your only asset a house worth £350k, then the IHT liable would be 40% of £350-£314K the current threshold - less than £15k.

At 65 in good health, average female life expectancy is coming on for 20 years. You may well need (or want) the equity you have in your house for yourself, to maintain your standard of living and to help pay for care should you need it.

I completely agree with this. None of us know what is ahead and you may well need all the resources that you have now, for your own needs.

A good example is what's happened to DH and me most recently. Luckily we still save although we're in our early 70s, just because we do not know what we might need! Completely out of the blue, DH developed a knee infection which turned to septicaemia and he nearly died, was in hospital for 4 weeks. Since October I've spent nearly £5K on upgrading the bathroom, new chairs, various things to make life more convenient and comfortable for us both - he still has left leg in a thigh-to-ankle splint and is facing more surgery. The £5K was following on from a wonderful holiday we had in September which cost approx £2.5K. What would we have done if we hadn't had that financial resource to tap into?

When I was 65 I wasn't worrying about what would happen after I was dead - I was too busy living, remarried at age 66 and have been busy ever since.