Inheritance Tax Planning

Careful_Shopper_3

oops sorry - Standing Order (always got mixed up between the two)

MarkyMarkD

No probs.

Standing order = push (you push the money into their account).

Direct debit = pull (they pull the money out of your account).

Richard_Richardson

Hello

I wonder if you can help me

I am probably like many people in the UK in respect of the position I find myself in.

My parents are both retired and their main assest is their house which is worth in the region of £600,000. The other assests they have are minimal in relation to this, maybe a few thousand pounds worth.

Currently they have a perfectly normal will which leaves everything to the surviving partner upon death.

My brother and myself have looked into this fairly well and are sure there must be a way of setting something up that reduces the IHT burden upon the death of the surviving parent. I.E. a trust etc

We have read various websites but wanted to seek some advise from this forum rather than read another article.

Are we correct in our view that there is something we can do ? If so, can some one please tell me what and how

Many thanks in advance.

Robert_Sterling_3

Each gets a Nil Rate IHT Band of £263,000
i.e. The first £263,000 is fre of IHT
Possible Total £526,000.

When we are young and married with children owning a house as "Joint Tenants" is usually a good idea.

If one of the parents dies the other gets every thing.
Money willed to a spouse is fre of IHT.

{ You need to have a paragraph in the wiull to cover the case when both parents die at roughly the same time because if only the children are left you may want the benfit of two nil rate bands }

Young parents want the relkatively cheap life insurance that pays off the outstanding mortgage balkance if ONE of the BOTH parents dies.

Older parents may wish to make use of two IHT nel rate bands. They need to own their house as Tenants in Common.

This is a common situation.

It can save about £100,000

So it is worth looking into.

I can't go into all the details here and now.

lynharmer

Wow, I have just read through all 149 postings and hopefully will now be able to sort some things out.
Too late for insurance (due to illness) but hopefully will now still be able to look into discrectionary trusts or at least get some advice. Between us my husband and I have lots of money tied up in our home, land rich, cash poor, but hate to think of the taxman getting any more than necessary, many Thanks to everyone

Robert_Sterling_3

Cheers and good luck to you lynharmer.

Robert_Sterling_3

More interesting reading for lynharmer

Robert_Sterling_3

MARTIN:

I was thinking about starting another thread on this topic but my previous postings on IHT evoked no replies whatsoever. Unless I am very much mistaken, you will have the same problem.

Members of this site seem more concerned with perpetually chasing 50p ‘freebies’ they will probably never use, rather than instantly saving £105,200 on their CHILDREN’S INHERITANCE that will definitely be used!

How wrong can you be?

Robert_Sterling_3

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?

No longer true

THFC

I am about to cover mine and my partners lives for the next 20 years. The reason that if one of us dies the other will not financially be able to bring our child up (Due in Janauary). The amount of protection is £400,000.

Over 20 years because after that time the child can hopefully sustain their own well being financially. The £400,000 will leave enough for outright purchase of a house (as we rent now), and along with our pensions enough capital to live comfortably for 20 years minimum.

This is a lot of reassurance for myself for such a small monthly payment

I understand that if one of us dies the other partner pays no inheritance tax as we are married. That is good.

But if tragically we both died (slim chance i know), our child would benefit to a large sum exceeding £500,000. Will inheritance tax be payable on this?

Are young children exempt?

And if so how can i reduce this burden?

If you only have one child are their other ways to reduce the level of inheritance tax they must pay?

I am only asking for advice, understanding that before doing anything i should check this advice.