Inheritance Tax Planning

Pinkleylandii

MSE_Martin wrote:

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Hi

Had the joy of going through the two hundred and odd items on this important subject. I am looking for an answer to a query which has been raised before by members but I can't see a final answer.

The query is simply this: Re the 2 year time limit for a deed of variation, can this variation be used to change Joint tenancy to Tenants in Common on the family home?

Come on you STEP members out there!!

Thanks John

sneekymum

Wouldn't have thought so...my friend's solicitor looked into all avenues possible after friend's mother died leaving her half the house (no IHT to pay) - only to find that since it was in Joint Names with estranged husband he copped for the lot as it instantly became his on death....

The act of changing tennancy arrangements is separate from the varying of a will. However - since the changing of tenancy only required each party giving notice to the other....if you look very hard you might discover such letters in the loft after all...I believe registring such a change at Land Registry to be optional...but don't take my work on that, as I'm no authority on such things...

5hreek

john -"The query is simply this: Re the 2 year time limit for a deed of variation, can this variation be used to change Joint tenancy to Tenants in Common on the family home?"

My father died in Aug 04 and we're still in the middle of sorting out the estate - our solicitor suggested exactly what you said - a retrospective severing of the tenancy agreement as part of the deed of variation. So I'd say yes it can.

As it turns out, we're not going that route but if the last year+ has taught me anything it's - "for the sake of your kids, keep your affairs well documented!!!!"

Robert_Sterling_3

I think that with a joint tenancy the survivor owns the property.
This is nothing to do with the will.
Whatever the will says the property belongs to the survivor.
Varying the will cannot alter this fact.
Move from JT to TIC at an appropriate time.
I think the Land Registry has a couple of form related to this matter.
I think no fees are involved.
I think it is sufficient that each of the two Joint Tenants writes to the other tenant stating that from this day forward they are to be Tenants in Common.
!! Doing this TICs all the boxes }



Caution: This is not Legal or Financial Advice

sneekymum

Yeh - well - that's what I thought...

but not wanting to argue with 5hreek about it I wonder if his solicitor would run into some dificulties if they tried to actually go ahead with that one.

But as fair warning to the hosts of silent viewers here - IHT Planning is best undertaken at least BEFORE YOU DIE - preferably many years before...

Robert_Sterling_3

Sneekeymum I agree with you.

shopndrop

My parents are thinking of chaning from joint tenants to tenants in common. Dad contacted a local solicitor who said it wasn't worth doing at their age (both 72) but didn't explain why. Is this something to do with them having to live another 7 years before being able to benefit?

Robert_Sterling_3

If their joint assets are not likely to exceed £275,000 this year or £300,000 next year I would agree with the solicitor.

sneekymum

Can't think of any good reason. The solicitor should explain himself - we'd be most interested.

The seven year thing is to do with surviving after giving a gift - it wouldn't apply to the family home anyway as your parents would be benefiting from a pre-owned asset (unless they paid rent) if they continued to live there - anyway, why shouldn't they survive seven years.

kazzy

kazzy
NotSoNewbie MoneySaver





Join Date: Dec 2004
Location: Dorset
Post Count: 143
Thanked 32 Times in 15 Posts IHT dreaded taxman

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How do you avoid paying IHT.?Any whizzy IFAs out there?
My mum has a house worth about £320k,£100k invested and about £50k dotted about.If she died tomorrow,she would pay IHT of about £78k.She needs the £100k which she invests to get a bit of income so cannot give it away and hope to live for another 7 years.She would also prefer not to move house.She is 70.Any ideas please????

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stamp out political correctness!