MIL has a lot of money. Advice?

Darlyd

gizmo111 wrote: »

In post 1 you sk how can you aproach her re the care home and in post 6 you say she would love one? Which is it I#m a litte confused.
Also you talk about your house and her owning some of it - how does that work, is it yours and your husbands house or hers and your husbands? Id the latter can she pay the mortgage off and have no tax implications.
Is she concerned about tax - or is it your husband that is?

She paid cash half for the house, he took out mortgage on other half.. She has offered to pay off his mortgage but he refused. She offered again Saturday when they were in the bank with financial adviser, and adviser told them that she would have to pay a lot of tax on any gifts over 3k.. ?

And yes she would love the idea of buying a care home, It's been mentioned before, (like I said she will read these posts). Just how would she go about all of this? Like I said she does want what is best for her kids, and would like to see where all monies would go too before that day comes. And I can assure her/you she has many many years left yet. She is a very strong and bright woman. And is by all means not stupid!

Lokolo

darlyd wrote: »

MIL told hubby she is concerned about what to do with her money, as she does not want to pay tax on any big gifts she wants to give, (she was told she could only gift just over 3k per person per year without having to pay tax on). And hubby told her I would find out about it, She will read all the posts.

Please no more judgemental posts, fed up of it, I am only asking on her behalf, perhaps I should of made that clear in OP. (I will edit)

If you don't want judgemental posts, don't ask for your MILs money.

The tax thing is a load of rubbish, no idea where any of you have got this. As I have said in previous posts, the tax that would need to be paid would be 40% on the assets, and any gifts made 7 years prior to the death, over £325k as a total.

As for the carehome :- http://www.businesslink.gov.uk

Website and information on setting up a business.

https://www.alliance-leicestercommercialbank.co.uk/bizguides/full/care/index.asp
http://www.startups.co.uk/buying-a-nursing-home.html
http://www.businesswings.co.uk/articles/How-to-buy-a-care-home

Guides to Care Home business

Darlyd

scottishblondie wrote: »

Sorry if you feel the posters are being harsh but the repeated references about "dying to ask her" to give you money and buy you a care home do make it sound like you want your OH's inheritance now!

If she has a stable income by way of pensions etc and doesn't need any more, then she can stick the capital into decent savings accounts and spend it as and when she wants. On the other hand if she might need it to provide an income over the longer term then she should seek professional advice on how to generate this.

The only tax to worry about is inheritance tax, which currently applies to estates valued at over £325k - assets over that are taxed at 40%. However, if her husband did not use any of his nil rate allowance when he died (i.e. everything went to her), then she can leave an estate of £650k before any IHT kicks in. The allowance may also have increased by the time she passes. Read the MSE guide on IHT to see a more detailed explanation. The 3k allowance just means that those gifts will be excluded from her estate when it's value it calculated upon her death. Also to be clear, this allowance is not per person, it is per year in total.

If she wants everything to go to your OH on her death (to the exclusion of her daughter?) then she must have a will, or the assets will be divided among the legal beneficiaries.

That has helped a lot.. Thank you.. (I think this is different to what a professional has advised her).

Her estate would defintly exceed £325k And I think this is what worries her. (The tax).

Hubby would have everything and it would be up to him how he divides it. (SIL is a druggie/alcoholic and hangs around with bad people.).

Lokolo

scottishblondie wrote: »

The only tax to worry about is inheritance tax, which currently applies to estates valued at over £325k - assets over that are taxed at 40%. However, if her husband did not use any of his nil rate allowance when he died (i.e. everything went to her), then she can leave an estate of £650k before any IHT kicks in. The allowance may also have increased by the time she passes. Read the MSE guide on IHT to see a more detailed explanation. The 3k allowance just means that those gifts will be excluded from her estate when it's value it calculated upon her death. Also to be clear, this allowance is not per person, it is per year in total.

Well remembered.

scottishblondie

darlyd wrote: »

That has helped a lot.. Thank you.. (I think this is different to what a professional has advised her).

Her estate would defintly exceed £325k And I think this is what worries her. (The tax).

Hubby would have everything and it would be up to him how he divides it. (SIL is a druggie/alcoholic and hangs around with bad people.).

Do read the guide - it will make things a lot clearer.

You say the estate will exceed £325k, but will it exceed £650k I mentioned with regards to the death of her husband? If he didn't make use of all or part of his nil rate allowance then it passes on to her. So all this worry could be for nothing.

And if this professional definitely said £3k per person for IHT exempt gifts, then I would seek advice from a different professional because they are wrong! There are other ways to gift money to fudge this a bit - the guide explains more.

lulu650

darlyd wrote: »

And yes she would love the idea of buying a care home, It's been mentioned before, (like I said she will read these posts). Just how would she go about all of this?

Perhaps visit estage agents and get an idea of the cost of buying one? Or look into converting a large house? Not sure where you live, but here in affluent Hertfordshire, I'm betting around £800,000 at least. I dread to think how much it would cost to run one.

gizmo111

darlyd wrote: »

She paid cash half for the house, he took out mortgage on other half.. She has offered to pay off his mortgage but he refused. She offered again Saturday when they were in the bank with financial adviser, and adviser told them that she would have to pay a lot of tax on any gifts over 3k.. ?

And yes she would love the idea of buying a care home, It's been mentioned before, (like I said she will read these posts). Just how would she go about all of this? Like I said she does want what is best for her kids, and would like to see where all monies would go too before that day comes. And I can assure her/you she has many many years left yet. She is a very strong and bright woman. And is by all means not stupid!

So is her name on the mortgage or did she gift the deposit?
How long have you been maried and what is your iterest in the family home you live in?

Darlyd

gizmo111 wrote: »

So is her name on the mortgage or did she gift the deposit?
How long have you been maried and what is your iterest in the family home you live in?

We been married for 1 year today (lived together for 2, been together for 8 yrs). I have no interest what so ever in this home.

And she is on the deeds.

gizmo111

darlyd wrote: »

We been married for 1 year today (lived together for 2, been together for 8 yrs). I have no interest what so ever in this home.

And she is on the deeds.

Is she on the mortgage?
I can think of better ways of spending my 1st anniversary than asking strangers how to spend my in laws money:p

Darlyd

gizmo111 wrote: »

Is she on the mortgage?
I can think of better ways of spending my 1st anniversary than asking strangers how to spend my in laws money:p

Believe it or not, We spoke about a lot today, And this is one of the things that was brought up more. He told her on Saturday (not me till today tut tut) That we will find out about it for her, as they were weary of the professional advice she was given on Saturday . Now I know I will show hubby the posts when he gets in from work tomorrow (I go straight to work when he gets home) And he can take lappy to his mums for her to read.

No she is not on his mortgage (maybe guarantor I am not 100%). She is just on the deeds so is FIL (who passed away 1 year yesterday)

Thanks again for all advice whether helpful or not .