Help please - is there a solution?

holly_hobby

Right so its not to avoid care fees, but an IHT mitigation exercise.

Ok ..

The 7 yr clock you mention, is relevant to IHT estate planning and specifically PETs (potentially exempt transfers), whereby the gift (and where the donor has no further benefit or use of the gift, after its donation) is classed as exempt from inclusion in the valuation of the decds estate, if the Donor surivives for 7 yrs after the transfer.

If the Donor retains any benefit, the gift can fall under gift with reservation regs, or pre owned asset tax regs - so its important to know what your doing if this is an IHT mitigation exercise.

If the FA is looking at IHT planning, simple things such as exercising her annual 3k exempt gift allowance, should be a very basic starting point for her FA. With Mum being able to roll over any unused allowance from 1 yr to the following yr, but it is capped at a max 1 yr carry foward - which means for example, if she has made no previous gifts last yr, she could make a 6k gift this yr (ie last yrs 3k allowance & this yrs 3k allowance).

There are other exempt gifts that can be made, which i won't go into to save confusing the post.

IHT planning will be relevant for mum if her net estate is likely to exceed the nil rate IHT exemption (currently 325k per person, or assuming only 1 spouse has pre-deceased her, upto 650k if there is unused decd spouse exemption available for transfer on her death).

Can I ask that Mum is seeking advice from a suitably qualified IFA/wealth adviser, as not all are qualified or experienced in IHT planning, and its important that they are aware of how to plan effectively, so that no errors are made which could cause more probs then it solves.

Hope this helps

Holly

Iamafreeman

Holly, many thanks again. Mum's IFA is very experienced in IHT planning however, what I'm proposing wasn't on the agenda last time we met.

If we have to 'write off' that part in order to achieve what we want, then so be it I guess.

I'm going to have another meeting with my mortgage advisor to see where I can go from here. We have a lot in our favour, but not necessarily the right bits :-)

Once again, many thanks for your help and advice. It's been of great value.
Cheers, Pete