What Tax Liabilty

artey

Yes McKneff, that is something we have discussed, however the sister is willing to take that risk.

richbeth

artey wrote: »

Yes McKneff, that is something we have discussed, however the sister is willing to take that risk.

Times of parental bereavement are extremely stressful and at time like this past commitments and often rational behaviour goes out of the window. Issues can be blown out of all proportion.

Over the last few years our extended family has unfortunately had 2 bereavements and in both cases issues with the will/finances have resulted in siblings (from different families) having irreconcilable differences, in both cases they no longer even communicate. In one situation a sibling was expecting a significant amount but the parent had to go into care and by the time of the bereavement there was a fairly small amount of cash left over as the care cost ca £25k pa. Another was very similar to your situation and got very unpleasant as people remembered things differently...

Every person and family is different but based upon recent experience I personally wouldn’t contemplate such a deal due to the chance that it could end up driving a wedge between me and my sister, I don't want to be on my death bed regetting something like this. However if you do please make sure everything is written down and fully agreed, just in case. It is probably worth speaking to a lawyer as well, they might have an idea of how to protect everyone e.g. with trusts.

Best of luck,
Richard

McKneff

Nobody has even mentioned poor Mother, who isnt even dead yet
:eek::eek::eek:

CTA_2

McKneff wrote: »

Nobody has even mentioned poor Mother, who isnt even dead yet
:eek::eek::eek:

Because personal matters like that are not what the OP is here for. He asked for taxation advice, not family affair advice.

troubleinparadise

I believe the tax question has been answered; so I'm indulging myself by adding that I'd love to know how this turns out in the long run!

It's an interesting proposal, and I can see the thinking behind it; but as to whether such a cerebral approach to what is essentially a financial transaction sits well in relation to the human condition is another matter....

If only it didn't involve an aging lady and her will! :eek:

xylophone

If she is so flush with cash and prepared to take the risks outlined above, why doesn't your wife's sister just make her a loan, interest free but repayable on demand within say a year of mother's death or your wife's death if earlier?

Your wife would need to take out life insurance to cover the debt to her sister?