Inheritance Tax: Save £100,000s with simple advanced planning Article Discussion

Keep_pedalling

evergreen wrote: »

If you downsize or sell your property because you need to go into a residential home, how does the downsizing IHT property allowance work? Thanks

Under those circumstances, your estate is treated as though you still owned the property, and your executors can claim the allowance.

evergreen

Thank you. I thought that's what it meant but wasn't sure. Since my husband passed away last year I'm considering a smaller property, but wondered what would happen if later I need residential care.

Scottie_72

Hi,
I just need some feedback. I was helping a friend go through obtaining probate and going through the IHT paperwork.

But I'm really worried that I'll do something wrong or make a mistake and it will come back on the next of kin. I booked an appointment with the solicitors for Monday, however they will charge £285 + VAT. I rang up Dignity Legal advice which came with the funeral package and they offered to do this at a fixed rate.

Has anybody used Dignity or someone similar or has had any advice to give.

Many Thanks in Advance

Anne

uknick

Scottie_72 wrote: »

Hi,
I just need some feedback. I was helping a friend go through obtaining probate and going through the IHT paperwork.

But I'm really worried that I'll do something wrong or make a mistake and it will come back on the next of kin. I booked an appointment with the solicitors for Monday, however they will charge £285 + VAT. I rang up Dignity Legal advice which came with the funeral package and they offered to do this at a fixed rate.

Has anybody used Dignity or someone similar or has had any advice to give.

Many Thanks in Advance

Anne

Are Dignity covered for any mistakes they might make? Solicitors and accountants have to have professional liability insurance.

If the estate isn't that complicated, e.g. a house, some cash savings and no gifts in the last 7 years, the forms aren't that complicated. A good read of the guidance notes beforehand helps enormously. Plus, when I did a probate a few years ago, the probate office were pretty helpful.

However, if the estate does have anything more complicated, i.e. large gifts, investments and business activities, I'd strongly recommend getting professional help from a qualified STEP solicitor.

https://www.step.org/for-the-public

STEP solicitors are Trust and Estate Practitioners, and is the designation given to full members of STEP. To become a TEP, practitioners must have a combination of specialist qualifications and experience, including significant involvement at a specialist level with inheritance and succession planning.

Babycakes

My mum died recently leaving everything to my dad. This is essentially the value of the house which they bought in 1976 and the only other assets they jointly own is £2000 in cash.

My dad is unwell and has left the house to his three grandchildren (over 18). Will they need to find money to pay inheritance tax? They do not have any cash.

Mojisola

Babycakes wrote: »

My mum died recently leaving everything to my dad. This is essentially the value of the house which they bought in 1976 and the only other assets they jointly own is £2000 in cash.

My dad is unwell and has left the house to his three grandchildren (over 18). Will they need to find money to pay inheritance tax? They do not have any cash.

How much is the house worth now?

Babycakes

According to Zoopla 1.1 million.

Keep_pedalling

Babycakes wrote: »

According to Zoopla 1.1 million.

Wow! That is an extreme example of being asset rich and cash poor.

There will be IHT to pay but the GC do not need to find the money, that is the responsibility of the executors acting for the estate. The house will need to be sold to pay the tax before the remainder of the estate can be paid to the beneficiaries.

Currently there will be no tax to pay on the first £950k of the estate and this will rise to £1M after April 5 202o.

Babycakes

Oh wow. If the house is sold, does that not mean that the grandchild becomes homeless until the cash arrives from the house sale? Is there any way they can get HMRC to take a second charge on the property?

Keep_pedalling

Babycakes wrote: »

Oh wow. If the house is sold, does that not mean that the grandchild becomes homeless until the cash arrives from the house sale? Is there any way they can get HMRC to take a second charge on the property?

IHT needs to be paid within 6 month of the death, and the best you will get out of HMRC is paying by instalments.

If as it seems the GC all live there and want to remain living there then the obvious solution is to take out a mortgage to cover the IHT costs, but if any of them want to take their share in cash then the house will need to be sold, in which case they will simply have to rent somewhere until they can buy their own place there is no need for any of them to become homeless.