Any advice for me??????????????

Toff

I am in the extremely lucky position to have a parents who have accumulated quite a few buy to let properties which they bought many years ago for peanuts.

They amount to about £4m worth plus the house which he lives in is another £1m approx.

They also has about another £1m worth of property in Cyprus consisting of their holiday home and some land where Dad grows his own veg.

He is fully retired and lives off his buy to let rental incomes at the moment, he is in his late 60's and now spends at least one third of his time in his holiday home in Cyprus.

Its an extremely embarrassing subject for me to raise to my father without sounding money grabbing, but it is already on my mind about what will happen with inheritance tax if he were to pass away. The idea of losing a whopping 40% on most of it doesnt bare thinking about, especially as we would have to sell half to save the other half.

Can anyone suggest a legal route to minimise or avoid the tax payable by my Sister and myself upon our inheritance.

If they were to spend longer in Cyprus would it help the situation in any way as I am sure they'd be willing if it somehow changed their tax status.

All advice greatly appreciated.

Mr_Ted

Pay your taxes like anyone else has to??????????????

If you want to live in luxury then earn it!!!!!!!!!!!!!!!

There are people in this country who have paid their dues and now live on the breadline as they dont have a benefactor!!!!!!!!!!

Toff

Mr_Ted wrote: »

Pay your taxes like anyone else has to??????????????

But I do pay all my taxes, there has never been a tax requested of me that I have not met. I am not asking to break any laws, if there are any legal ways to minimise it why shouldn't I benefit from it? Is that a crime?

Are you honestly telling me if you were in my shoes you'd be happily donating the 40% if there was a truly legal and legitimate way of reducing that?

Your attitude goes totally against what i thought this website was about. The site has a whole page dedicated to reducing inheritance tax. Entitled "Save £100,000's on death duty" and another entotled "How to avoid IHT"

chrismac1

Toff I agree with you. In a nutshell, this forum is called "Cutting Taxes". Anyone who does not like that, don't be on here.

I think you need specialiast advice, you are correct in that you'd probably face a big bill which would have to be paid up front in the event of your parents dying unexpectedly. The non-residence angle, if it is going to work at all, needs expert advice. UK tax residence law - unlike a lot of countries - is not statute law but governed by case law and hence some cases appear to contradict one another and so the whole thing is pretty messy. Merely leaving the country for 183 days each tax year does not necessarily cut it if your GP, DVLA records and so on are still here - in other words you've not "severed the ties".

CLAPTON

with a £5m estate at issue it's worth spending a few bob getting professional advice

McKneff

Am I right in thinking though that the inheritance tax would be paid by the estate, it wouldnt be paid by you and your sister. Im no expert so i could be totally wrong and Im quite happy to be corrected

Your inheritance would be what is left so in effect you are not losing anything, your just not getting as much as you thought you were going to get. Your father is paying for it, whether here or not.

Toff

I have spoken to a few accountants but as soon as I get technical with my questions they seem clueless and tell me to find an accountant that specialises in it which I am yet to find.

Very often it is surprising as the forums seem to have more good advice than the so called 'experts'.

Can anyone recommend an expert in this field, one that truly knows it all about this subject, one that won't just pass me on to the next person?

Toff

McKneff wrote: »

Am I right in thinking though that the inheritance tax would be paid by the estate, it wouldnt be paid by you and your sister. Im no expert so i could be totally wrong and Im quite happy to be corrected

Your inheritance would be what is left so in effect you are not losing anything, your just not getting as much as you thought you were going to get. Your father is paying for it, whether here or not.

Well yes but whether I get the whole amount and then pay the tax or whether its taxed before I get it, its more or less the same meaning isn't it? Basically a large chunk is lost.

I am assuming the HMRC will value it all and then calculate 40% on anything above the approx £300k and then start selling pieces off to get that 40%.

Some of the assets are houses converted into self contained flats, so out of ease these would likely be sold for cut price as one house split into flats rather than sold as individual flats to achieve top money.

My other fear is that because they need to be sold within a certain timeframe they will not acheive their true sale price potential so in essence it could be 50% or more of the assets that are going to go to settle the tax bill.

Its all too much for my head.

le_loup

Toff wrote: »

Its all too much for my head.

You wait till you inherit several million pounds, then it will be too much for your head!
Such a large fortune must be handled by an expert. Pay for some advice.

Mikeyorks

Shouldn't it be your parents doing the IHT Planning? There are plenty of experts in that field.

Or are you doing it as potential Executor?

Toff

Mikeyorks wrote: »

Shouldn't it be your parents doing the IHT Planning? There are plenty of experts in that field.

Or are you doing it as potential Executor?

Executor. Hmm, thats such a horrible word when its used about money to be inherited after parents death.

Reason I am looking into it is because my parents are extremely old school and have no idea about tax planning etc. They are not some lottery winners or money inheritors themselves. My dad drives a 2002 Fiat, my mum still gets the bus to Sainsbury's. Very simple people. They just not savvy to any forms of tax planning so they will do whatever I tell them basically, its been like that for years.

In short I'd like them to tidy up their situation rather than leave it until one of them is tragically unwell to make a last minute panic to pass assets down. Its just planning. I actually feel guilty talking about it but I doubt they are even aware that 40% of what they leave will be lost.