Inheritance Tax Article MoneySavingExpert.com Discussion

jenniferpa

Why would you do that - it's still a gift with reservation.

margaretclare

But if you donate your house, even if you donate half-and-half as you suggest, where are you going to live?

Margaret Clare

Annies_4

Your article suggests that Gordon has changed the rules for discretionary trusts. I don't think that is true.
He has changed Accumulation and Maintenance Trusts (so that the money must be taken by age 18)and Interest in possession trusts( e.g. if you give life interest in a house). Please check whether I am right and make the position clearer in the article.

RaspberryFool

Most tips seem to revolve around married couples. However, like Fenella in the earlier post, my divorced mother-in-law needs income from her capital to live on. I suspect that, with her house included, she would be about the nil rate threshold for IHT. Aside from the aforementioned Discounted Gift Trusts, are there any other things that she can consider to minimise IHT when she finally leaves her estate to her children?
Is the general advice to speak with a member of STEP? (I'm not sure whether they tend to be solicitors or IFAs).

viking1

I understand £3,000 can be given to a son each year and this lowers the amount for inheritance tax from a parent's estate. However I am not clear whether this gift is classed as income for the recipient and if it exceeds the personal allowance amount (circa £4,900 I think) then it means they are liable to tax on any amount that such a gift may take them over that allowance, for instance if they work partime and earn £3,000 already. Can anyone shed any light on this point?

Tazman_4

Hi
My farther has 3 houses worth just over 400,000 in total , what would be the best way to avoid Inheritance tax by passing the house between his wife and two children .
Thanks

Chrismaths

There is no inheritance tax between husband and wife.

To avoid inheritance tax on passing assets to children, he needs to give away assets, something he may not want to do. If he gives away assets and survives for 7 years, then there is no IHT.

The first thing your parents should do is make sure their wills are written to make full use of the Nil rate band (285000 this year), as this will save £114,000 in IHT straight up. In other words, make sure there is a clause that on the first death, the NRB is paid either to the people they want (making sure that the survivor is still provided for), or to a Trust (although Gordon Brown has changed the rules recently, without telling anyone what the new ones are).

TBH they need professional advice.

oldgit74

getting into this HIT lark, butcan anyone advise what may happen if i kick off soon, got 9years left on my guaranteed annuity of 14900 pa gross. Can Life say it gets paid to my estate,my wife is non tax payer, will it go as her income then? thanx for any info.Don

SHIPSHAPE

From a very recent experience regarding Inheritance Tax I was recommended a company who were fantastic, https://www.nationallegalservices.co.uk

Their website details more but, in short, they give a free consultation and offer fixed rates for their services which was a massive saving compared to solicitors, banks, IFA's etc.

I'm sure Martin is aware of the fees that these will charge compared to the £500 or so for an Inheritance Tax saving will paid to National Legal Services, with no sneaky charge on an estate that can run into thousands!

As far as money saving is concerned, a few hundred quid spent in order to save literally tens of thousands is my best tip!

hilspars

My father now has a bee in his bonnet about inheritance tax, especially as he and my mother cannot agree about their financial future.
He is 72 and wants to join an action group or lobby against inheritance tax. Any ideas?