Inheritance tax

margaretclare

hcb42 wrote: »

It's a different culture, not everywhere shares our values..although even our royal family, the men are prioritised.

I am informed that that may be about to change.

John_Pierpoint

margaretclare wrote: »

Assuming your son has a son. Not every father has a son! What happens if he has daughter/s? Or even no children at all? I know many men who have no sons.

I thought we were living in the 21st century, a new millennium. This all sounds a bit medieval.

Not medieval Margaret, just Victorian:

Girls are still not really wanted in parts of the world where they become the property of their husband's family.

"Married woman's property act" v Pin money?

No votes.

Taxation levied on illegitimate children (presumably to punish them for their mother's sins)

No legal adoption until 1928.

I would think that the greater majority of the world still thinks like that and in India & China modern technology is being used to get the desired result.

I've just been staying with a "farmer": B&B & EM for 14 quid.
He (51) and his wife had 7 girls before achieving the male heir.
There was also a grandson about the place but I could not enquire too closely about the kid's absent father.

Any way at least here in the UK we are back to Anglo Saxon Standards. (Actually I am not sure about Anglo Saxon society, perhaps a passing expert can comment - before I am accused of racist attitudes towards Norman invaders).

margaretclare

Oh, I'm prepared to be VERY racist towards the Norman invaders!! (VBG)

I suppose what I was trying to say in a roundabout fashion was - why do these type of issues come up in OUR country, where we live according to English law and English customs, ways of thinking? What they do in other countries does not really interest me.

You're right about the Married Women's Property Acts. Until April 1990 it was still assumed that a married woman's earnings formed part of her husband's income for tax purposes and he could be sent refunds due to her and be written to about her tax affairs. This was one change in which I am proud to say I played a small part, although it took many years of letter-writing and lobbying to bring about independent personal taxation. I was told that it was a 'loophole' in the MWPA because it had never been envisaged in the 1880s that a married woman would have enough earnings to be taxable. Beveridge in 1942 didn't assume she would be at work because 'she has other duties'.

MrandMrsB

snooping_around wrote: »

Hi guys

Got a few of basic questions and would be grateful for advice.

1) If parents die and do not have a will, do their estate and cash go to their chilren equally? Or does it all go to the tax man!?

2) The nil-rate threshold is current 325K. Does this mean for example if 800K was the inheirtance for 2 children then:
- 650K will be tax free (150K will be taxed at 40%) leaving each child with 370K
or
- 325K will be tax free (475K will be taxed at 40%) leaving each child with 305K

3) There is a link on MSE for places I can do a will. http://www.moneysavingexpert.com/family/free-cheap-wills Can anyone recommend a good one?

Thanks

J

1) It's too complicated to give a quick answer. Basically if both parents die without remarrying, the estate will pass equally to the children of the last one to die (or if it is impossible to say which one died last, as in a car crash, to the children of the youngest parent). "Children" includes adopted and illegitimate children.

2) Second option is correct - there is only one nil-rate band available for the whole estate.

3) It's best to rely on a recommendation.

John_Pierpoint

This is anther case of "Unless you are pretty confused, you have not begun to understand the situation".

To create a full decision tree for all the possibilities in your question, would probably require about a yard of MSE forum display.

If you post your particular situation, then we can have a go at answering.

Thought starters:
How old for both parents?
Legally married?
Living where?
Dying where?
Nationality? (That will do for starters)?
Step children from a previous relationship?
Breakdown of all sorts of wealth including property?
How much of this wealth is owned jointly?
(Particularly for real estate) What sort of joint ownership?
Unclaimed pensions?
Anything "held in trust"?
Gifts to charities?
Gifts and PET's before they go?

It is not clear from the original posting if you are contemplating the end result, two deaths from now, when two parents have died?
Since October 2007 we all have a nil rate band for IHT of (now) 325K - none of it gets used up if we leave everything to the surviving spouse or same sex legal partner.
So in this case 100% of a nil rate band would be carried forward so that the second to die would have 100% of two nil rate bands (at the amount then on offer according to the latest tax legislation). Obviously if the first to die had left 162.5K to their favourite nephew, then the second to die would have only 100% of one nil rate IHT band and 50% of a second nil rate band.

worn_down_2

further information to add to my post is that the my husband was resident and domiciled here. The property is in a rural village in Africa and was owned by my husband (inherited from his father ) and passes to my son by forced inheritance( I think this is the correct term!). The land is distributed by the village elders to the families. The trust is not on paper but a cultural given in his country. I could not sell it as it belongs to the family. There are no local amenities so not a commercial property but family house.

Any

worn_down wrote: »

further information to add to my post is that the my husband was resident and domiciled here. The property is in a rural village in Africa and was owned by my husband (inherited from his father ) and passes to my son by forced inheritance( I think this is the correct term!). The land is distributed by the village elders to the families. The trust is not on paper but a cultural given in his country. I could not sell it as it belongs to the family. There are no local amenities so not a commercial property but family house.

This is a very special case.

Theoretically, as your husband was domiciled here there is IHT rules applicable to all his worldly possesions. The fact that it is family house means nothing in regards to IHT, IHT is applicable to family home too. ie if my MIL dies, we will have to include her house in the estate.
Actually on commercial property you have more chances of getting some kind of relief LOL!:-) (if it is personal business and not investment..., or holiday let).

However, as you cannot sell it as it is in some kind of cultural trust, I am really not sure if anyone here will know how to proceed in this case... I think you will need to speak to the big HMRC themselves..

This is a toughie!

John_Pierpoint

Care to name the African state (Libya?) and post a picture of the house?

You make it sound like a third world corrugated box with no squatter's rights.

VOA (District Valuer) asked me for a photograph - felt like saying check "Street View" - but I was able to supply a floor plan and some extra photos to back up my contention that it was the second most dilapidated house in the road.

Mary_Hartnell

If your husband had the use of the property under an interest is possession trust (a "life interest") then the value of the property would form part of his estate under English law. (There is no logic in tax but if there was, it would be that none of us can take it with us when we go).
However as the property is in a foreign land there could well be a taxation treaty explaining what happens in this situation.
Being realistic, does the tax man know about this grass hut or has your husband been claiming it as a holiday let?