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

Grumpy_chap

I read the title but not all the 113 pages of this thread. 
I acknowledge the thread started back in 2007, which is a very long time ago (Tony Blair was still Prime Minister) and the rules may well have changes a lot since then.
It is just the title (Save £100,000s IHT) is alarmist and likely to raise concerns amongst many for whom saving £100,000s IHT is simply impossible.  You can't do planning to save that much tax unless the Estate will be liable for that much tax in the first place.  For most couples, that means a total Estate of £1.25m or more by the time of second death and after any care costs have been met.
It is not the majority that will be subject to this level of IHT to save.

cadavell

My wife & her sister have power of attorney for there mother, they sold her home to help finance care home expenses. 

There mother has about £337,000 in the bank plus about £10,000 in shares.

Her will is equal share after her death, no spouse. Will they pay inheritance tax

eskbanker

cadavell said:

My wife & her sister have power of attorney for there mother, they sold her home to help finance care home expenses. 

There mother has about £337,000 in the bank plus about £10,000 in shares.

Her will is equal share after her death, no spouse. Will they pay inheritance tax

At the risk of stating the obvious, that'll depend on the value of the estate at the time of her death....

Keep_pedalling

eskbanker said:

cadavell said:

My wife & her sister have power of attorney for there mother, they sold her home to help finance care home expenses. 

There mother has about £337,000 in the bank plus about £10,000 in shares.

Her will is equal share after her death, no spouse. Will they pay inheritance tax

At the risk of stating the obvious, that'll depend on the value of the estate at the time of her death....

As she was a home owner the residential NRB also applies so unless cadavell’s mother wins the lottery or comes into a large inheritance herself her estate won’t have any IHT to pay. 

Astrocyte100

My daughter is on benefits due to long term illness.  She will never be fit to work again.  It came as a shock when I realised that, if I leave her any money or property, her benefits will be reduced till it is all gone.  Effectively a 100% inheritance tax.  I can see both sides of the argument: benefits are for those that need them but it seems cruel that she should lose the money that we earned and saved for her.

2010

If you leave everything to your legal partner, apparently there`s no IHT to pay no matter the value of the estate.

Jeremy535897

Astrocyte100 said:

My daughter is on benefits due to long term illness.  She will never be fit to work again.  It came as a shock when I realised that, if I leave her any money or property, her benefits will be reduced till it is all gone.  Effectively a 100% inheritance tax.  I can see both sides of the argument: benefits are for those that need them but it seems cruel that she should lose the money that we earned and saved for her.

But if she'd saved her own money, she would not get benefits either, even though she'd have paid income tax etc on earning it. 

Nurseynev

My will leaves everything I possess to my daughter. However I do not mention my house. Do I need to mention it to get the £175K inheritance tax allowance

uknick

Nurseynev said:

My will leaves everything I possess to my daughter. However I do not mention my house. Do I need to mention it to get the £175K inheritance tax allowance

No, as it will be assumed your total estate includes the house you live in.  Plus, if in future you sell and decide to rent you might have to rewrite your will as the property specifically mentioned in your will will no longer be part of your estate. 

Keep_pedalling

Astrocyte100 said:

My daughter is on benefits due to long term illness.  She will never be fit to work again.  It came as a shock when I realised that, if I leave her any money or property, her benefits will be reduced till it is all gone.  Effectively a 100% inheritance tax.  I can see both sides of the argument: benefits are for those that need them but it seems cruel that she should lose the money that we earned and saved for her.

Not necessarily, if for instance she is in rented accommodation she could purchase her own home with an inheritance and that would not count as deprivation of assets. You should also investigate the possibility of your will creating a disabled person’s trust. You should talk to a STEP solicitor about this.