Inheritance Tax Planning

margaretclare

Can't answer most of this, but I do know a little about joint accounts. There is nothing to stop any joint holder of a bank account from emptying the account and disappearing over the hill - that has happened in numerous relationship break-ups. In other words, if you and your father have a joint account the money in it is counted as being part of his estate, not 50/50, all of it. It's the same for you, but it's your father's money and the implication for tax that you're concerned about.

FWIW my view is - if he doesn't need the money and you do, what is the point of him hanging on to it. Far better give it away while it can do some good. That's just me - ignoring all the stuff about IHT.

Margaret

elliebean_2

type-r wrote:

I have a quick question which has been covered however I have a slight variation on it. Say my father wishes to "give" me £25k from his estate NOW but not through a trust... does the 7 year rule still apply? By this I mean say he passes away in 8 years time, do I have to declare on the appropriate forms that I received a gift 8 years ago? Or is there a time-limit for them to do their checks?

The executors do not have to mention gifts made more than 7 years prior to the testator's death.

type-r wrote:

Also, if my father was to say put the money in a savings account in joint names (myself and my father), is it still liable for IHT?

Yes, if your father put all the money into the account, even though it is in joint names, it would still fall into his estate for IHT purposes.

HTH

type-r

Thanks guys, that's quite useful info esp. about joint accounts.

Jake'sGran

South_Hams wrote:

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.

I am about to write a new will and leave my half (tenants in common) to my daughter. I will also leave cash to her and my son. I decided on this as a way of avoiding IHT.
A solicitor did point out to me that my daughter could, at some stage, if very short of money, insist on the house being sold. I now hope to write the will in such a way as to ensure her half of the house could be realised only on the death of my husband. That should work shouldn't it?. The possibility of my daughter demanding the house be sold is so remote as to be laughable but I hope to do the method described to ensure my husband has peace of mind.
The balance of funds would be left to my husband but would not reach (with his half of the house) the IHT threshold. Anyway, I am seeing a solicitor in two weeks and hope he agrees.

Tiggs_2

Jake'sGran wrote:

I am about to write a new will and leave my half (tenants in common) to my daughter. I will also leave cash to her and my son. I decided on this as a way of avoiding IHT.
A solicitor did point out to me that my daughter could, at some stage, if very short of money, insist on the house being sold. I now hope to write the will in such a way as to ensure her half of the house could be realised only on the death of my husband. That should work shouldn't it?. The possibility of my daughter demanding the house be sold is so remote as to be laughable but I hope to do the method described to ensure my husband has peace of mind.
The balance of funds would be left to my husband but would not reach (with his half of the house) the IHT threshold. Anyway, I am seeing a solicitor in two weeks and hope he agrees.

what if your daughter marriers and dies - the half that was yours is now owned by someone you dont even know.

there are ways of using the house and the nil band- but that aint it!

Jake'sGran

Tiggs wrote:

what if your daughter marriers and dies - the half that was yours is now owned by someone you dont even know.

there are ways of using the house and the nil band- but that aint it!

Thank you Tiggs. I seem to remember you told me as much some months ago and that you are a professional. Therefore, I will have a look back to see what was said then and ask the solicitor in two weeks which is the best way to go. I think it might help if my husband showed the slightest interest but he just can't seem to get his head round it which is, in one way, the reason I am the one with the savings. Also, I automatically assume my daughter will not die before me as I have a bad heart. Also, she has been married for 25 years and has a great family. I'll really be glad when it is all sorted and I can forget about it.

Tiggs_2

Jake'sGran wrote:

Also, I automatically assume my daughter will not die before me as I have a bad heart.

My folks are also geting on a bit..... but a bus with my name on won't care when it squashes me!

Your planning is all very assumptive and that sort either goes very well (as planned) or pear shaped in a big way....which is why no adviser would like to suggest it - we fear the shapes of pears!

whats with your hubby...give him a kick up the backside!

EdInvestor

Lot of useful info about the various types of discretionary trusts here:

http://www.tenminutewill.co.uk/pdfdocs/discretionary_trusts.pdf

Jake'sGran

Tiggs wrote:

My folks are also geting on a bit..... but a bus with my name on won't care when it squashes me!

Your planning is all very assumptive and that sort either goes very well (as planned) or pear shaped in a big way....which is why no adviser would like to suggest it - we fear the shapes of pears!

whats with your hubby...give him a kick up the backside!

Tiggs, I had a boss in the '80s who used to often say to me "but suppose you go under a bus". He was very insecure. You just reminded me.
My husband has always been useless with money but always very generous.
I started retirement planning in the 80s and have done well. Whenever I try to discuss things with him he tries really hard to take it all in but I know by the next day it's all forgotten. The finances have always been taken care of by me. Some would say "lucky him" but I would hate not to know the details of financial matters. I'll see what the man says next week about my planning but I'd rather go alone as my OH will just muddle everything with irrelevant questions.

earlzdon

I'm childless and not getting on with my partner. I don't want a divorce. I want to will as much as possible to my nephews and nieces. I got a will made by a solicitor which gave all my assets (excluding house) to them. Then told by another solicitor that partner entitled to at least 50% of my assets anyway and willing it to nephews and nieces my partner could claim it all.
Heard that if I will 50% to my brothers that would be ok. Can't find any information about wills and childless couples when money not going to partner on the net.
Can anybody give me any advice or links to relevant websites please?