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

ortolickus

I've had my Will drawn up under the 'free wills month', but it's become apparent that - even after charitable donations - i could be liable to a substantial amount of IHT. My 'free wills' solicitor wants £450+ VAT to discuss IHT and (presumably) ways of avoiding it.

It seems to me that a few fairly straightforward 'gifts' to grandchildren would avoid any liability - provided i don't peg out for another 7 years. Even if i did, AFAICS the tax would be reduced proportionately depending on how long i'm around.

So, should i cough up 540 quid or maybe approach Vouchedfor or some other 'free' service? Or do something else?

Any guidance would be gratefully received.

eskbanker

ortolickus said:

it's become apparent that - even after charitable donations - i could be liable to a substantial amount of IHT

You wouldn't be liable for IHT, but it could be an issue for your estate (which by definition you wouldn't be around to witness)!

ortolickus said:

It seems to me that a few fairly straightforward 'gifts' to grandchildren would avoid any liability - provided i don't peg out for another 7 years. Even if i did, AFAICS the tax would be reduced proportionately depending on how long i'm around.

Would you be left with enough to cover multiple years of funding care, i.e. could/would deprivation of assets potentially come into play?

ortolickus said:

So, should i cough up 540 quid or maybe approach Vouchedfor or some other 'free' service? Or do something else?

Any guidance would be gratefully received.

Vouchedfor isn't a free service as such, in terms of helping you decide what to do, it's just a means of making contact with financial advisers.  Whether or not you'd benefit from paid financial advice is something that only you (or someone with full sight of all your financial circumstances) can decide - if you've haven't read the MSE article that this thread was created to discuss, it highlights many of the key issues to consider....

Keep_pedalling

ortolickus said:

I've had my Will drawn up under the 'free wills month', but it's become apparent that - even after charitable donations - i could be liable to a substantial amount of IHT. My 'free wills' solicitor wants £450+ VAT to discuss IHT and (presumably) ways of avoiding it.

It seems to me that a few fairly straightforward 'gifts' to grandchildren would avoid any liability - provided i don't peg out for another 7 years. Even if i did, AFAICS the tax would be reduced proportionately depending on how long i'm around.

So, should i cough up 540 quid or maybe approach Vouchedfor or some other 'free' service? Or do something else?

Any guidance would be gratefully received.

Taper relief is not going to apply unless you are giving away more than your NRB (£325k) and only then to the portion of the gift over that.

The other simple solution that does not require 7 years to drop out of your estate is to spend more on yourself. 

dowpic

3. Passing on your home can BOOST your allowance to £500,000 (if you leave it to your children or grandchildren)

In the Inheritance Tax article, section 3. above, it talks about passing (willing) your property to a child.

I'd like to ask: Does this have to be a very  specific statement within the will, saying "that my property (name of property) passes to my "son/daughter" naming the child", or would simply saying in the will that "all my property and possessions passes to my son/daughter ... naming the child" ... cover this requirement. Thus avoiding a large chunk of inheritance tax?

Thanks

uknick

dowpic said:

3. Passing on your home can BOOST your allowance to £500,000 (if you leave it to your children or grandchildren)

In the Inheritance Tax article, section 3. above, it talks about passing (willing) your property to a child.

I'd like to ask: Does this have to be a very  specific statement within the will, saying "that my property (name of property) passes to my "son/daughter" naming the child", or would simply saying in the will that "all my property and possessions passes to my son/daughter ... naming the child" ... cover this requirement. Thus avoiding a large chunk of inheritance tax?

Thanks

Both would do.

The will needs to make clear who is getting your residential home and it is going to a direct descendent which can include step and adopted children.

If you want to specifically state the property is going to XXX, be more generic.  You don't want to write a will that says leave "Home 1" to my child, and then move to "Home 2" just before you die.  Bequeathing a property you no longer own could be an issue.  

dowpic

Thank you knick, that's really helpful to know.
Would appreciate your  comments on the very general phrasing I added "all my property and possessions passes to my son" Is this wording not specific enough. Only it does then prevent the Will having to be changed in the event of moving house.

uknick

dowpic said:

Thank you knick, that's really helpful to know.
Would appreciate your  comments on the very general phrasing I added "all my property and possessions passes to my son" Is this wording not specific enough. Only it does then prevent the Will having to be changed in the event of moving house.

That seems OK as the executor and any reader of your will will know from that you intend all your possessions to go to your son.

Applepieandcustard

Just looking at the transfer of inheritance tax allowance from say husband to wife, and then to children making allowance up to £1,000,000.
What would happen if husband and wife died at the same time?
If both had the same wills, benefitting partner first, then children, would the transfer of allowance still be given?

Jeremy535897

Applepieandcustard said:

Just looking at the transfer of inheritance tax allowance from say husband to wife, and then to children making allowance up to £1,000,000.
What would happen if husband and wife died at the same time?
If both had the same wills, benefitting partner first, then children, would the transfer of allowance still be given?

The older is deemed to die before the younger, if it is not possible to tell. So the answer is yes.

PegasusPJ

the article says the unused % of the IHT nil band passes to the spouse.. but what if the 1st deceased spouse had no assets to pass on to the 2nd in the first place? (none passed to anyone)