Inheritance Tax Planning

KD

Just joined - so 1st post. Sadly, my dad died a couple of weeks back , I'm having to learn fast about lots of things and trying to deal with the practicalities first.

Having read the IHT thread in full feels like I'll get some expert help.

Just two points of initial clarification -:

1. what does probate mean?

2. My father lived in Scotland are there any differences I need to be aware of re- tying up / estate / IHT / etc?

MJD

:-/ Having just worked my way through this entire thread my head is now spinning - what a subject! ???

I can't help but feel the easiest thing is to spend spend spend - and let the state pick up your nursing home bills when you have run out of cash - at least you will have kept the taxman away (to a certain extent) and had a good time on it.

On a serious note. Earlier in the thread there was talk of a married couple owning a house as 'Joint Tenants' or as 'Tenants in Kind'. How does one find out what the position is?

My wife and I own the house which is mortgaged. I have dug out the paperwork relating to the purchase and have located a copy of the Land Registry Title but cannot find exact reference to this on it. Am I looking in completely the wrong place?

If it turns out we are 'Joint Tenants' and we wanted/needed to be 'Tenants in Common' does it take much to change this? (both time effort and money)

Jaime_Bien

MJD - look at the proprietorship register on the certificate - if it states "restriction : no disposition by a sole proprietor of the land (not being a trust corporation) under which capital money arises is to be registered except under an order of the registrar or of the Court" - then you hold as tenants in common ("tic").

Otherwise you hold as joint tenants ("jt".)

To convert jt to tic you need a notice of severance which is registered at H M Land Registry using forms AP1 and RX1.

A good first point of contact is the Land Registry website and helpline -

http://www.landreg.gov.uk/customerservice/

Finishrich

I'm sure I read somewhere that funeral expenses can be paid from the estate before Inheritance Tax, assuming this is right. How lavish a funeral can you have?

I'd always thought I'd be burried, but the last few years I've been thinking more toward cremation; then of course where the ashes would be scatterd. There's a place we go on holiday which would be quite nice then just yesterday I thought of another place. So could the expenses for the family to travel to these destinations to scatter the ashes be included as funeral expenses ?

If they can I must suggest this to my parents

Jaime_Bien

Finish Rich - only reasonable funeral expenses are deductible from the value of the estate when calculating IHT.

Further, a reasonable amount for post-service refreshments is allowed together with the cost of a tombstone or headstone.

Unfortunately, travel to and from a funeral, or scattering of ashes, is unilkely to fall within the relevant legislation.

Finishrich

Thanks for that, but reasonable can mean different things to different people

lisyloo

but reasonable can mean different things to different people

The only important interpretation is that of the inland revenue.

In general it's not a good idea to stretch things to the limit with them.
They have some fairly wide ranging powers e.g. turning your house upside down looking at every single bit of paper.

If you need genuine guidance then they would be the best people to contact because the only thing that matter is what they consider reasonable.

Finishrich

I'll bet there would be conflicting answers even from the IR.

kate.walk

As a moneysavingexpert devotee, who is not just 'Gettingonabit' but , shall we say, 'In the Departure Lounge of Life', I'm interested in your article on minimising the amount of inheritance tax paid. Is it possible for the married couple to each eave half of the house to their children but to stipulate that the surviving partner shall have the right to dwell in it until they themselves die, at which time their half of the house is also left to the children?

Kate

Finishrich

The £3000 that you are allowed to gift each year, can it only be gifted to your children or are grandchildren and other people included in this?