Inheritance Tax Planning

Robert_Sterling_3

Normally a person or persons can change their will at any time. If you moved to a different house for example you might both change your will.
Wills need to be consider whenever a significant life event occurs.

crook

There appears plenty of adivse for married couples with childred, is there any guidance for single people with no childred?

Robert_Sterling_3

Such people should make a will.
If they give all their money to charity there will be no Inheritance Tax.

frugal_dougal_3

Does anyone know whether any Inheritance Tax becomes payable in the UK if you die after emigrating to a non EU country if your beneficeries are still in the UK?
Or do you just pay it to the country you have emigrated to (provided they have it of course)

MJSW

IHT is levied on worldwide assets for persons with a UK domicile. So you would still be liable to IHT if you emigrated abroad, unless you managed to acquire a 'domicile of choice' abroad.

An individual generally acquires the domicile of his father ('domicile of origin'). The domicile of origin is retained unless he acquires a domicile of choice elsewhere, which is fairly difficult to do. Long residence in another country in itself is not enough to acquire a domicile of choice there. You generally need to sever all ties with the domicile of origin and establish residence in another country with a clear intention that you will make your permanent home there. You would need to do things such as sell any properties owned in the UK, set up home in another country, and even indicate that you wish to be buried abroad when you die!

Even then, you are still deemed to be domiciled in the UK for IHT purposes for a further 3 years after the UK domicile has actually ended.

If you do manage to lose the UK domicile, then IHT is still chargeable, but on the value of UK assets only. Assets held abroad would be ignored if you are not domiciled in the UK.

savvaco

Dear Martin,

This is my first time so I am a bit unexperienced.
I was reading your advice on making a will to avoid IHT.
Say myself and my wife made a will to leave £263.00 to our two grown up children and the rest to each other.
If say, I died the children get £263.000 and the rest of our estate goes to the wife. Now if say both of us died in an accident what happens then. Does this means that the chldren will get £263.00 free of IHT from mum and £263.000 from dad before they start paying IHT?
Pleas note that everything we own is in joint names.


Thank you in advance

Robert_Sterling_3

When making a will it is usual to have a clause which says something like

"To my Wife /Husband ( Name here ) , if she/he  survives me by at least 30 days ( or any other period ) I leave this that and the other "

If two people die and it is not known who died first then the law assumes that the older person died first.

I would not myself use a solicitor as an executor but I would, and have, paid a solicitor to draw up a will.


[ This is not legal advice ]

bronte_2

Hi I'm new to all this, but wow what a lot of interesting stuff!..and such a wealth of knowledge.. thought I'd ask advice myself!

My mum is a sprightly widow at 60, and has invested most of her lifetime savings with my twin brothers into a fabulous property worth about £750k. I'll add that my brothers live with her because it makes economic sense and as they both have mild learning difficulties it gives my mum some worth.

What happens hwen she eventually passes on? She has talked to me about this as she really wants to ensure that I 'get something'. As it is the home of my brothers I could hardly insist that they leave and sell the house but what could we do? Can any one advise please?!

Robert_Sterling_3

The property is already worth £750,000 and your mother is only 60.
It follows that if only £263,000 can be left to the children free of Inheritance Tax it follows that the Tax due from the house alone would be £194,800 !
As your mother is living in a £750,000 house it might be that she is asset rich but cash poor. Or it might be that she has consierable further assets.
You have the right to remain silent on such matters however without further facts it is difficult to give advice.

Your two brothers might have a "right" to continue to live in the house.

I think I will chicken out at this point and await further comments with interest.

bronte_2

Mum is asset rich and cash poor. My 2 brothers will undoubtedly have the right to living there as they can show that they have contributed to the bills and to a small element of the building works.