Adivce please

billyolly

My wife and i have just turned 60 We would like to alter our will giving our 2 children 25% each and we own the other.If either on of us passes away the other gets to stay in the house. I understand that to avoid inheritance tax we have to live for 7 years after making the will.Any advice would be helpful.

Biggles

billyolly wrote: »

I understand that to avoid inheritance tax we have to live for 7 years after making the will.

No, the '7 year rule' is nothing to do with wills.

How it works is that, if you actually make any gift, it may be counted as part of your estate for IHT purposes until seven years have passed - http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm#4.

dzug1

What you are doing is fraught with problems - not necessarily fatal ones but awkward nevertheless

You need expert advice from a solicitor who knows what he's doing

Linton

A bit confused - are you giving the children the half house now or only when either you/your wife dies? If the latter then the 7 year rule isnt relevant - it applies to gifts made up to 7 years before you die.

missile

I have a friend who works in an old peoples home. There are some who have gifted their homes to avoid inheritence tax. Their kids don't even bother to visit them.

chesky

missile wrote: »

I have a friend who works in an old peoples home. There are some who have gifted their homes to avoid inheritence tax. Their kids don't even bother to visit them.

Maybe so, but it doesn't necessarily follow and it certainly need not apply to the OP's children.

billyolly

Looks like we will have to find a way of gifting part of the house to our kids.If i am in an old peoples home i would have given up the will to live and would not want my children to see me any way.

agrinnall

How much is your house and other assets worth? If it's less than £650,000 then there should be no IHT to pay anyway (as long as the will is correctly written).

sebastianj

What do you mean 'correctly written'?
seb

missile

chesky wrote: »

Maybe so, but it doesn't necessarily follow and it certainly need not apply to the OP's children.

I am not making judgement on OP's children. I am merely suggesting it is a big decision which OP should consider carefully. Only billyolly can judge if this is right for his family.

We all like to think we have done the best we can for our children and hope our children will be there for us. Many children do have time to enjoy with parents in their golden years. Those who have given away their assets may find themselves forced to depend on state funded care.

As Agrinnall has pointed out, unless a couple have £650,000+ there should be zero IHT to pay. There may be a CGT liabilty to consider. Hopefully billyolly will seek advice from their solicitor.

Savvy_Sue

agrinnall wrote: »

How much is your house and other assets worth? If it's less than £650,000 then there should be no IHT to pay anyway (as long as the will is correctly written).

I could be wrong, but I suspect the OP is less concerned about IHT than about the possibility of not being able to pass the house on as an inheritance / being required to pay for any care home fees should either parent require it.