Any way to reduce inheritance tax after a person has died?

theGrinch

surely a person can leave money to who they want in their will.

should tax be paid on income that is already taxed and if so at what levels/rates? well its a whole new discussion.

getmore4less

roddydogs wrote: »

You cant "Just find out" you were Executors, it had to be agreed in advance.

you can there is no requirement to notify anyone you intend to put them in a will as executors.

Allthough once you find out you are not obliged to do the job.

getmore4less

theGrinch wrote: »

surely a person can leave money to who they want in their will.

should tax be paid on income that is already taxed and if so at what levels/rates? well its a whole new discussion.

look up HMRC IHT plenty of information to help you understand inheritiance tax.

For a basic estate 40% tax over £325k.

John_Pierpoint

I was almost exactly the the same situation as you are.
The differences are:
I only lived a round trip of 110 miles from my uncle.
I was sole executor.
The will was faulty.
The house was worth a good bit more than yours.
I was one of 12 beneficiaries named in the will.
My uncle died in the teeth of the economic melt down and at just the right time to get caught up in HMRC's "restructuring".

Paste this into Google, it will give you a few thought starters:

“Mr Dog” site: forums.moneysavingexpert.com


If you have any specific queries just ask in this thread or send me a PM.


Good luck.

unlucky67

Will look into the helpful suggestions a bit more...
As to the not knowing much - my uncle was a second dad to me - our relationship hadn't got to the point where it swapped over and I became the carer - if that makes sense. I still asked him for advice etc...and never gave him any. My dad and uncle between them would have decided the executors etc.
As to the other comments - he looked after his money because he wanted to look after us ...not to fund the state and the same with giving it charity - this is 'family money' to be passed on to our children so he can look after them too...I would rather he was still here to that in person than have any amount of money.

It isn't about the money so much as the principle ...this money has already been taxed as income - what upsets me most is if I think about the no of hours of hard work that my uncle, grandfather and their forebearers put in to get this money....hourly rate would have been less than the minimum wage...
My family were tenant farmers on the same land for over 200 yrs. My uncle worked with my granddad - every day of the week, 365 days a year. About 30 years ago they got a compulsory purchase order on the land...my granddad couldn't bear to watch his fields built on. They sold up and bought a very modest house and my uncle lived with them as a carer. If they hadn't, me or one of my siblings would have taken over the farm...
My uncle would have inherited most of the money 7 yrs ago when my grandma died and then more when his aunt who had no children died 5 years ago (who also worked all her live -only to spend the last years of her life in a care home paying full whack - whilst someone sitting next to her paid nothing...)
I have a small house (paid for by my grandma before the property boom) I don't have a flash car, flat screen tv, expensive holidays, an ipad, smart phone etc. I don't have to worry about money ... if I think carefully about what I spend. I have money in the bank which is intended to help my children buy a house etc so they will always be ok...because I too want to look after them even when I'm no longer around...now I'm thinking that is a mistake...

Randvegeta

Hi Unlucky67,

Indeed it is unfair. Many countries do not tax inheritence but this country seems to think it is perfectly acceptable.

FYI, if you have a large estate, you could always consider moving abroad where it would be considered tax free!

Since the UK has IHT which applies to the person who has passed, the inheritee would not be taxed at all. You could theoritically (when you retire), take your money to a country where there is no IHT, and then pass it on to your children TAX FREE.

I'm afraid I have no advice to you not regarding your uncle. I'm sorry for your loss. Pay no attention to jelous A**H***s!

John_Pierpoint

Pennywise wrote: »

A will can be varied by deed of variation if all the beneficiaries agree.

Have a look at the new charity beneficiary rules introduced last year - you can give some of the inheritance to charity and benefit from more than the IHT rate of 40% in tax relief.

My understanding is any single beneficiary can vary the will as far as their share goes, but HMRC will only allow one bite at the cherry in the two years allowed after death, so there could be a conflict of interest if a dozen beneficiaries all had different ideas..

The new charitable "give 10%+" rule starts on 6th April 2012:
http://www.hmrc.gov.uk/tiin/tiin652.pdf

xylophone

http://www.harrison-drury.com/wills-and-probate-update/using-a-deed-of-variation-to-alter-distribution-of-an-estate/

As I understand it:-

A deed can only be drawn up providing:

Everyone affected agrees (if the variation affects the rights of children or unborn children, Court approval is required).

No-one is compensated for what they give up

None of the assets are affected by a Gift with Reservation

You would be well advised to consult a solicitor experienced in wills and trusts? http://www.step.org/

le_loup

unlucky67 wrote: »

It isn't about the money so much as the principle ...this money has already been taxed as income

If it's not about the money, then do the variation and give it to charity.
Lots of money is taxed more than once. National Insurance, VAT, Fuel Duty, Interest Income, Stamp Duty ... do I need to go on?

John_Pierpoint

unlucky67 wrote: »

About 30 years ago they got a compulsory purchase order on the land...my granddad couldn't bear to watch his fields built on. They sold up and bought a very modest house and my uncle lived with them as a carer. If they hadn't, me or one of my siblings would have taken over the farm...
My uncle would have inherited most of the money 7 yrs ago when my grandma died and then more when his aunt who had no children died 5 years ago (who also worked all her live -only to spend the last years of her life in a care home paying full whack - whilst someone sitting next to her paid nothing...)

I am slightly confused, were the previous generation land owners or tenants or perhaps both?
It is a shame, from your point of view, that the state needed the land and so pushed them off it [In exchange for compensation based on something like 20 years loss of profits? Not what Mr Businessman is prepared to pay for a country seat, a subsidy collector, plus an IHT avoidance device.]

That is when the IHT planning could have been done - country people are usually rather well advised, by a mixture of their union and surprisingly smart local solicitors.
Businesses in general and farms in particular offer opportunities for IHT planning not available to ordinary wage slaves.

Anyway what is done is done - my parents were in a similar situation to your current dilemma.

unlucky67 wrote: »

I have money in the bank which is intended to help my children buy a house etc so they will always be ok...because I too want to look after them even when I'm no longer around...now I'm thinking that is a mistake...

Let us hope it won't be, but with a government policy designed to keep interest rates at an all time low and with printing money devaluing it, you will have to be cute to maintain its value.
I tend to bang on about this but the government spend is now about 50% of the GDP, back in the 1960s it was nearer 25% of a much smaller economy with far fewer working women and primitive technology so why is it costing twice as much to run the government?. OK there has been huge increase in transfer payments to the young and the old. The former don't seem to get a "real" job until about 25 instead of 15 and the latter retire at 65 and die 20 years later, rather than about 7 years later - that cannot be the whole explanation.
This state has been heading down the path of Greece, flogging off "the family silver", every thing else too and writing a blank cheque to be cashed by our children and grandchildren for 25 years. So if your children want to hang around in the UK they will be able to do so as there won't be anything much in terms of help from the welfare state. If they want to emigrate they will be better positioned to do so, though their money has been devalued and there are a lot fewer countries that will take them now than there were in the 1960s., the EU excepted.