Inheritance Tax Planning

Robert_Sterling_3

There are still more unknowns than knowns.
Are you married?
Does your mother have Grandchildren?
How old are you and your brothers?
What is everyones position Vis a Vis pensions?
Is there a mortgage still outstanding in respect of the house?
I do not suggest that you provide any of this information.
I can see the problem you and your mother share in wishing to have an equitable arrangement.

bronte_2

!!I'm married, 40 and I have 3 children-the only grandchildren. My brothers are 41 not married not likely to be. There are pensions knocking around- nothing major

bronte_2

..and no mortgage on the house!

Robert_Sterling_3

Thank you for the further information.
As I see it there are several important factors.
1) Possible Inheritance Tax of approx £200,000
2) Your brothers will have a right to live in the house.
3) Eventually you or your children might or might not inherit from your mother and from your brothers.

I am not sure what the legal significance of having "slight learning difficulties" might be.

I can't work out whether or not your mother should give each of your brothers a third share in the property with some proviso [ legal advice essential here ] that they in turn leave their share , in a will, to you or your children.
This would at first sight save about £200,000 in inheritance tax as each of them would be able to leave £263,000 free of the tax.

It is not every day someone suggest a way of saving a couple of hundred thousand pounds.  ;)



This is neither financial, legal or any other kind of advice it is someone thinking out loud about your situation

Robert_Sterling_3

Thank you.
I am sure you are right to seek legal advice.
You could start by asking the C.A.B.

Need_to_know_more

Hi - I'm a newby at this, but here goes:
My mother put into place a discretionary trust in her will and we have now been granted probate.
The solicitor that we used for this has made understanding of this arrangement very difficult. It seems her way to be a licence to print money as she's charging for all our questions but never seems to reply in English >:(

My father is in the process of trying to sell their home but it is likely even when he moves that he will not be able to put the full amount allocated under my Mothers will into the trust. So we have been told that there will have to be a Loan Load (IOU) put in there for the difference. It seems that this could be a downside to this kind of trust for 2 reasons.
1) this loan would be subject to stamp duty
2) the Revenue may challenge in the future that as my father is having the benefit of this loan, on his death it could be looked at as really being in his estate and not my mothers

Anyone got feedback on these 2 points?

It also said in the Mail on Sunday Financial section yesterday, that the Tenants in Common arrangement needed for these kind of trust maybe challenged and the law changed to close this type of trust. If we have already set this trust up will we be exempt from this change?

thanks in advance for any help on these questions

angelavdavis

I don't have children, but have two parents in their mid-late 60's.

2 and a half years ago, they gifted £70,000 to me towards a property that we all now live in. The property is in my name, my name is on all the bills and it is valued at £350,000. £150,000 is mortgage.

Can anyone recommend what provision I should be looking at to ensure that, in the event of my dying before my parents, they are not turfed out of the house.

I have a will, but all it says is that all my belongings go to my parents in the event of my death.

Any help would be appreciated! Thanks~!

Robert_Sterling_3

Hi - I'm a newby at this  
No problem

My mother put into place a discretionary trust in her will

and we have now been granted probate.

The solicitor that we used for this has made understanding of this arrangement very difficult. It seems her way to be a licence to print money as she's charging for all our questions but never seems to reply in English  
Tell me about it.  No don't bother Charles Dickens has already written about it.
 

My father is in the process of trying to sell their home but it is likely even when he moves that he will not be able to put the full amount allocated under my Mothers will into the trust. So we have been told that there will have to be a Loan Load (IOU) put in there for the difference.  

OK


It seems that this could be a downside to this kind of trust for 2 reasons.
1) this loan would be subject to stamp duty
OK  How Much.  Don't forget you are up to £100,000 ahead of the game so far.

2) the Revenue may challenge in the future that as my father is having the benefit of this loan, on his death it could be looked at as really being in his estate and not my mothers
OK  usually any change in the law is not backdated.  George Brown has deviated from that tradition but gave people more than a year to reconsider their position.  George Brown does not intend to get at "ordinary people" only the super rich.

Anyone got feedback on these 2 points?  

It also said in the Mail on Sunday Financial section yesterday, that the Tenants in Common arrangement needed for these kind of trust maybe challenged and the law changed to close this type of trust. If we have already set this trust up will we be exempt from this change?

If the law changes who knows what the new law will be.  Not me.
If it changes will you be exempt.  You may be you may not be.  My personal opinion is that you will be.

P.S. You may or may not know that by mutual agreement amongst themselves the benficiaries of a will can "vary" a will provided that this is done within two years of the deceased persons death.  You could ask your solicitor if varying the will could be done in such away that your liability for tax was reduced.  

Robert_Sterling_3

I don't have children, but have two parents in their mid-late 60's.

2 and a half years ago, they gifted £70,000 to me towards a property that we all now live in.  The property is in my name, my name is on all the bills and it is valued at £350,000.  £150,000 is mortgage.

Can anyone recommend what provision I should be looking at to ensure that, in the event of my dying before my parents, they are not turfed out of the house.  

I have a will, but all it says is that all my belongings go to my parents in the event of my death.

Any help would be appreciated!  Thanks~!  :D

I assume the problem relates to the fact that there is at present a £150,000 mortgage which your parents would not be able pay themselves.

Find out how much £150,000 life insurance would cost.
I think it should not be to costly as it will only pay out in the event that you predecease both your parents.  Have the policy written to pay the insurance to one or both of your parents if they are living at the time of your death.  Premium will be higher if you smoke. etc. SHOP AROUND for best Premium ... They vary a lot.

You have not given all the facts so the above statements might not apply in your case.  This is neither Financial nor Legal Advice.  

RANDY_3

Looking for any advice/suggestions please.
My mother is widowed and in poor health, her estate would be valued at approx £320,000. Which will be split
20% of the total to grandchildren and 40% each to myself and my sister.
The IHT would be approx £23,000.
Any ideas how we could protect ourselves from that, and the gov't getting their hands on more of her money?.

Thank you.