Inheritance Tax Planning

Navara2205

My Mother is disposing of her property to downsize for her retirement. Selling for £450K, buying for £270K. She is considering buying the new property in mine and my two brothers names, ie 1/3 share each. I understand that this will be seen as a 'Gift' and understand (I Think) the tax liabilities should she pass away within the next seven years and how the tapered relief will apply after year 3. She anticipates that after paying off outstanding debts that she will have savings in the region of £110K. She also has early stages of Parkinsons disease and understands that she will eventually need to go into care. Whilst I would not want to compromise her comfort in her old age, she is insistent that whilst a care home may dig into her savings she doesn't want them to get their hands on her house which understandably she would like to leave to us.

Can somebody advise me please that if her funds depleted over the years, could they insist on the sale of the house at any time within the seven year period to fund her care ?

I realise that she would have to pay rent to live in the house and current local rate, and that the three of us would have a tax liabilty each year. The rent would cover any tax and expenses. Should she need to vacate the house to go into care, we could then rent it out to contribute to care costs.

Any opinions please will be greatly appreciated.

margaretclare

Jake'sGran wrote: »

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

JakesGran, I've just seen this and it struck a chord with me.

You see, there was a split - a very acrimonious one - between my 2 daughters, to the extent that I lost touch for some years with the elder one and her family.

In November 2002 my younger daughter was here. I'll never forget it. She sat at the kitchen table looking out at the birds in the garden and talked about the importance of hedges as wildilife corridors - she'd just qualified in countryside management and had just got a dream job with the county council. We walked down the garden together looking at the plants. I remember that I said 'This will all be yours one day'. She squeezed my arm and said 'I hope not for a very long time'.

She and her husband drove away. The next time I saw her she was in her coffin. She died aged 39 at the end of December 2002, of an undiagnosed heart condition that she'd had from birth. Like you, I thought I would die first, because I also had a 'heart scare' back in 1989.

Margaret

Marriontheman

Hi All

Would like your thoughts on the following:

Lets say for example my girlfriends grandfather has a large estate and many invstments, essentially a lot of money that could cause a huge inheritance tax issue.

Would it be plausable and legal for him to play a game of poker with me and for me to win all of his money and assets, therefore essentially giving all of his money away to me and avoiding any inheritance tax, and for me to then distribute the money amongst his family as i see fit?

As far as I am aware it is legal to gamble privately in your own home and there is no tax on gambling winnings.

Could this work?

Thanks in advance for your thoughts.

stevepett

clairehi wrote: »

Ive just looked on the company's website - Allied Professional Will Writers and they only charge £550 direct

And there is no mention of them being members of the IPWW> I think Im gonna go elsewhere.

Allied Professional Will Writers are members of the much larger Society of Will Writers, and are regulated by them. The Society has several times the membership of the Institute and is consequently able to offer regular training meetings in most parts of the country. The IPW are great - but not the only professional body!
Society members are required to carry out significant training and updating every year specifically on Wills, LPAs etc and members are generally very well briefed on new developments - my own Region (Sussex) had done substantial training on them when much of the rest of the industry was still wondering what had hit them!

But don't get me started on LPAs..................

Steve

Baggysdad

Would it be plausable and legal for him to play a game of poker with me and for me to win all of his money and assets

And what is he going to live on once you have 'taken him to the cleaners' and then given his money and assets away?

And where is he going to live? - he will need to move out of his house, or at least pay a fair market rent to the new owners (who will need to pay income tax on their new income) if he is to get around anti avoidance measures.

Also you will need to survive for 7 years otherwise your estate (and your beneficiaries) will end up paying IHT on all of the gifts that you have made.

cwhitmore

I have been left some money by my grandmother who lives in Canada. The estate is liable for tax in Canada, but will I be liable for tax when I pay the money into my account in the UK?

Pee

Marriontheman wrote: »

Hi All

Would like your thoughts on the following:

Lets say for example my girlfriends grandfather has a large estate and many invstments, essentially a lot of money that could cause a huge inheritance tax issue.

Would it be plausable and legal for him to play a game of poker with me and for me to win all of his money and assets, therefore essentially giving all of his money away to me and avoiding any inheritance tax, and for me to then distribute the money amongst his family as i see fit?

As far as I am aware it is legal to gamble privately in your own home and there is no tax on gambling winnings.

Could this work?

Thanks in advance for your thoughts.

Very good question. I suggest his Dr and the local vicar to play with you, and don't let them see you cheating. I suggest he plays with all the family so that the distribution is the way that he sees fit, though. Not that I don't trust you.

scumboss

dannybhoy wrote: »

i used these guys before, they seem pretty knowledgeable on inheritance tax stuff....

http://www.avoidpayinginheritancetax.co.uk

Danny if you are going to plug your own website at least try and hide it. :rotfl:

Domain name:
avoidpayinginheritancetax.co.uk

Registrant:
Danny Quinn

Trading as:
Practical Prosperity

Registrant type:
UK Individual

Registrant's address:
14 spindrift wynd
saltcoats
saltcoats
KA21 6GB
GB

roger_c

cwhitmore wrote: »

I have been left some money by my grandmother who lives in Canada. The estate is liable for tax in Canada, but will I be liable for tax when I pay the money into my account in the UK?

Once the money is transferred into your name then you will pay tax on any income (interest) generated from it. If you are a basic rate tax payer no further tax will be payable on the income generated.

The above assumes that you are UK resident, ordinarily resident and UK domiciled.

SeniorSam

Pee wrote: »

Very good question. I suggest his Dr and the local vicar to play with you, and don't let them see you cheating. I suggest he plays with all the family so that the distribution is the way that he sees fit, though. Not that I don't trust you.

Thr Revenue are far more aware of 'scams' than you may think.

In this senario, unless there was a clear record that the grandfather was a compulsive gambler who often too silly risks and lost or won substantial amounts of capital opr assets, they may interpret the 'game' as fictitious.

The fact that the doctor and vicar were there would not hold weight in my opinion, particularly the doctor who may consider the grandfather not to be in sound mind?

Most of the 'back door' tricks have been tried and it can only cause grief, so beware.

There are many legitimate ways ti minimise inheritance taxes, particularly in respect of gifting, but gifts in excess of certain limits will suffer taxes.

Take professional advice.

Sam