Inheritance Tax Planning

MSE_Martin

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MSE_Martin

It's a very important subject you're right. I hope people take note.

One quick point though - if anyone wants to take issues on Paul's point ;D ::) about boots toe seperators please don't do it here - take it to the Discussion thread.

Martin

System

Hi,

My Father has recently passed away and has left his entire estate to my mum. Together this is worth about £500,000. I have just completed Probate, but have been told that I should look to do a deed of variation on my dads will, so the money he has passed can be put in trust, to avoid the IHT when my Mum passes. Is this easy to setup by myself, or should I really use expert advice?

Regards
Neil

System

For us, this is an important topic. Really don't want to have to give the Tax Man any more than we will already have done. Still don't understand enough about it, so any comments or tips which appear on this board will be viewed with great interest.

Many thanks.
Mo

System

Is it correct that, if IHT is due, the estimated amount must be paid BEFORE Probate is obtained when you can then liquidate the assets? It seems like a checken and egg situation.
If it is correct, must the executor obtain a loan to pay this amount? I have been named the executor in my mother's will, and as the expected inheritance tax is going to be around £80,000 I am worried.

South_Hams

Hi,

My Father has recently passed away  :'( and has left his entire estate to my mum.  Together this is worth about £500,000.  I have just completed Probate, but have been told that I should look to do a deed of variation on my dads will, so the money he has passed can be put in trust, to avoid the IHT when my Mum passes.  Is this easy to setup by myself, or should I really use expert advice?

Regards
Neil

My wife and I were advised by our Solicitor not to go "tennents in common" as passing a share in the property to the children may cause problems for the surviving spouse. He suggested that we go the "deed of variation" route, which can achieve the same result but hopefully much later in time.

System

I dont really understand how it works....but I read somewhere that the best way is to leave everything in a trust fund.

System

Excellent topic
I will view any comments with great interest as the official guides available are a mine field of information.

eg: 'How to Pay Zero Inheritance Tax' contains 8 chapters and 56 pages of solicitor written language.

If you are likely to be involved in signifcant IHT amounts then you should start protecting your heirs from the taxman now and the most important step is to organise your will.

Also you may require a life insurance policy and the younger you are the cheaper the policies.

Best advice is go see a Tax Planning professional.

System

If you give money away before you die, it is still usually counted as part of your estate and eligibel for inheritance tax if you die within seven years of giving the gift. Therefore one golden rule is try and survive more than seven years - which means early planning of how to pass on your assets is important.


If my Mother gives me £10,000. and then dies 1 year before the 7 year limit, how will they know that she gave me £10,000 6 years earlier in order to count it as part of her estate?

lisyloo

There isn't an easy way for them to know (although if they investegated they could look at bank accounts).

You will have to make declarations and sign forms.
If you aren't honest then it's an offence, either fraud or tax evasion.
It's quite a serious offence.

Unless you get £10,000 in notes and put it under the mattress then there will be a paper trail through the banks which theorectically they could find if they looked.

Under normal circumstances they won't go to these lengths but I wouldn't advise you to take the chance.

System

Interesting,

Look at it another way, lets say you needed a new car and it costs £10,000. Your mum buys the car and registers it in her name, then lets you insure and drive it!

Is this traceable as a gift?

Yorkieds