Tax Implications??
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dazed75
Posts: 4 Newbie
Hi,
Firstly I hope that this is in the right, section, I would really appreciate any thoughts, I don't know how unusual my situation is. I will try and keep this short.
My Dad is very unwell and is being cared for in a private care home. His brother (my uncle) and my older brother both have full control and access to his finances which I am more than happy with. Last week an application to have all care costs paid for by the local council was granted (full Continuing Healthcare), as a result dad no longer has any expenses to contend with (he has been ill for a while and all his finances have been fully rationalised).
With this burden removed it now means that the income that he was making from various investments to pay for his care are no longer required for his day to day living. Looking at all his assets there is a realisation that the income from his investments will quickly push his estate over the Inheritance Tax Threshold. My Uncle has suggested that rather having the interest paid into my dad's current account, that the income generated should be split and paid to my brother and myself.
Has anyone heard of a similar situation before? Do me and my brother have to declare this income (although as my uncle has stated, tax would have been paid at source).
Thanks for your ideas.
Firstly I hope that this is in the right, section, I would really appreciate any thoughts, I don't know how unusual my situation is. I will try and keep this short.
My Dad is very unwell and is being cared for in a private care home. His brother (my uncle) and my older brother both have full control and access to his finances which I am more than happy with. Last week an application to have all care costs paid for by the local council was granted (full Continuing Healthcare), as a result dad no longer has any expenses to contend with (he has been ill for a while and all his finances have been fully rationalised).
With this burden removed it now means that the income that he was making from various investments to pay for his care are no longer required for his day to day living. Looking at all his assets there is a realisation that the income from his investments will quickly push his estate over the Inheritance Tax Threshold. My Uncle has suggested that rather having the interest paid into my dad's current account, that the income generated should be split and paid to my brother and myself.
Has anyone heard of a similar situation before? Do me and my brother have to declare this income (although as my uncle has stated, tax would have been paid at source).
Thanks for your ideas.
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Comments
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Read this post but think I will bite my tongue rather than reply....I bet there are thousands of people out there who wish they were able to be in this position of having considerable assets and not having to contribute to their health care0
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I have absolutely no idea, but it sounds a bit dodgy to me.
Its your dads money, I wouldnt think uncle could just allocate it to you both in order to avoid paying IT
On second thoughts, it sounds a lot dodgymake the most of it, we are only here for the weekend.
and we will never, ever return.0 -
Words fail me!!!!!!!!!!!!!!!0
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I think the OP and his family should hang their heads in shame.....there is a fine line between money saving and greed and they have just overstepped that line.....0
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Thanks for your ideas
Trust me, you wouldnt thank me for mine.0 -
If your uncle can come up with this idea, how on earth can you trust him now when you know he has no scruples, you know now he would lie and cheat, even if it is for yours and your brothers benefit. Are you 100% sure he's not shaving some finances off too.
Does he have power of Attorney, get rid of him, you and your brother look after your dad. Your dad is unwell, could he die,
give over worrying about his money and what he may have to pay in IT, make the most of the time you have left with him and
leave the inheritance till it happens.make the most of it, we are only here for the weekend.
and we will never, ever return.0 -
The income thus 'gifted' will still count as part of his estate for inheritance tax purposes, apart from the small exemptions that are given.
Added to which if you are controlling his finances by a power of attorney making such gifts would be exceeding your powers - and thereby stealing from him. Only the OPG can approve such gifts and they've no real reason to do so.
If you are controlling his finances informally then you would be stealing from him anyway.0 -
There aren't many situations where having income producing assets that cope with previous care costs and have a capital value that would take the estate above the IHT threshold, so I think you should expand the circumstances/details, please.0
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"The income thus 'gifted' will still count as part of his estate for inheritance tax purposes, apart from the small exemptions that are given." ... Would there be the possibility that this would now become an excess of income over required amount for ordinary living and if "regular" in gift would take it out of the estate value?.
I ask this as beneficiaries of an aunt's estate were regularly "gifted" with annual exemption plus "excess of income". (Though this has not been done since the Enduring Power of Attorney was first signed)0 -
"The income thus 'gifted' will still count as part of his estate for inheritance tax purposes, apart from the small exemptions that are given." ... Would there be the possibility that this would now become an excess of income over required amount for ordinary living and if "regular" in gift would take it out of the estate value?.
I ask this as beneficiaries of an aunt's estate were regularly "gifted" with annual exemption plus "excess of income". (Though this has not been done since the Enduring Power of Attorney was first signed)
Probably yes - but there's still the actual legality of doing it in serious doubt. You cannot just help yourself to the assets of someone who is not capable of making decisions for himself.0
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