Can you do anything to mitigate inheritance tax after death

Mojisola

scoped1 wrote: »

My great aunt has left everything to my dad (which he will share 50/50 with his brother of his own accord) and my great uncle's will is the one that states a 50/50 split of his part of the estate.

My great aunt changed her will without getting advice on the specifics of limiting inheritance tax, otherwise i imagine that is what she would have done.

Depending on the size of your father's estate, this could result in an inheritance tax liability on his own estate if he is unfortunate enough to die within seven years of gifting the money to his brother.

If he is willing to do a deed of variation, it would be wise to split his mother's estate into three - £162,500 to himself, the same to his brother and everything else to his father.

uknick

OP, in answer to your question re deprivation of assets,

This is related to care home fees and local authorities. If somebody needs care home fees paid, and they don't have any money the council must pay. However, the council will/may take a close look to see where the resident's assets have gone. If they think they have been deliberately transferred to avoid paying care bills the council has powers to recoup the assets.

On the subject of care home bills, if your uncle no longer has any assets, and the loss of assets doesn't fall foul of the deprivation of assets rules could you "lose" more in care home fees than IHT if you transfer the funds back to him?

Most homes want between £30k and £50k a year. How does this compare to the estimated IHT charge? This may be why your aunt left the estate to your father.

In addition, I don't know what the council policy is where your uncle's care home is located if your great uncle has no assets. Will the council leave him where he is and pay the home, or will they move him to one of their preferred homes?

Or, am I making this over complicated?

Mojisola

uknick wrote: »

On the subject of care home bills, if your uncle no longer has any assets, and the loss of assets doesn't fall foul of the deprivation of assets rules could you "lose" more in care home fees than IHT if you transfer the funds back to him?

Most homes want between £30k and £50k a year. How does this compare to the estimated IHT charge? This may be why your aunt left the estate to your father.

I can't believe anyone would rather pay inheritance tax than use the money to make sure their relative is in a good home and able to buy any extras they want!

uknick

Mojisola wrote: »

I can't believe anyone would rather pay inheritance tax than use the money to make sure their relative is in a good home and able to buy any extras they want!

I agree, it wouldn't be an issue for me, but nowt queer as some folk. But, I do know some who would rather not let it go to care home fees.