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

fpoptani

Hi there,
Need some advice on tax matters. My wife is due to recv a house in the UK approx value 130,000. We live in the UK but my In-Laws live abroad and have had this house since 1999 when they bought it for 95,000. I have just become self employed and havent got a clue of my future income. With this minefield of Inhertiance tax and CGT what can i do to reduce the tax bill. I was thinking to leave and sell the proprty when its still under my in-laws name and just get the cash rather than pay stamp duty and sell it on. Basic question is how should the in-laws gift the property to us.
thanks

wilmaT_2

My children are aged 19 and 16, they both inheritted £18,000 each from their Gran. They wont need this money until they are in thir late 20's and i was wondering where would be the best place to save?

cptncanary

I've read through this thread with some interest, but hope my situation is less complicated: -

my father passed away in 2005, and the house was lef to my mother. She sold the house for £303k last November, and moved in with my sister. She has since paid for a fair amount of renovation work on my sister's house, and is now talking about giving my brother and I a lump sum from the house proceeds.
Would either my sister's house works or the lump sum given to me and my brother, be liable for taxation?

Her remaining total assets are under the £300k threshold, so is this a mute point?

MoneySavingMummy_5

Hi

Hubby & I (both in our 40s) are in the very unwise situation of having currently no wills, a property worth > £600K and a 6 year old daughter with associated school fees. I know that we need to sort things out but have no idea where to start. Do we go to a solicitor for wills first or an IFA to do some inheritance tax planning first or is there someone out there that can handle all our requirements under one roof?
Very confused - which is why we keep putting off dealing with it

Any input gratefully received

Murdina

start with the solicitor who should be able to offer IHT planning as well if you indicate that you want that.
Alternatively, get a simple will made asap which leaves everything to each other and creates a trust if both of you sadly die at the same time so money goes to your daughter & her circumstances are taken care of. This should be your number 1 priority given her age & yours, not saving IHT. When one of you dies do you want the other to have the money or someone else? I suspect your spouse will need it to bring up the child. Wills & IHT planning should be revised regularly say every 5 years so it is not something you do just once.
Think too about life assurance if one of you dies - again more important just now than IHT I think.
Hope that helps.

harryhound

Choosing the executors is your really important decision. The two of you could not really make decisions for years from your grave.
As a minor cannot inherit until 18; and that is too young in my opinion, your executors would automatically become your child's trustees unless a more complicated independent trust structure is required. I think it is pretty improbable that both of you will die at the same time.

Cliff_Derek

If you want to change ownership of your house to tenants in common it has no cost. Simply phone the Land registry and ask then to send you a rather inexplicable form. If you both sign and return it, that is all you need to do.

Before the latest IHT changes my mother-in-law created a discretionary trust, using a deed of variation, after the death of her husband. The trust is extremely simple, it has a bout £200,000 in assets in bank deposit accounts. But we cannot find any web site that explains how to run such a simple trust without professional help. Any ideas?

Gregm

MoneySavingMummy wrote: »

Hi

Hubby & I (both in our 40s) are in the very unwise situation of having currently no wills, a property worth > £600K and a 6 year old daughter with associated school fees. I know that we need to sort things out but have no idea where to start. Do we go to a solicitor for wills first or an IFA to do some inheritance tax planning first or is there someone out there that can handle all our requirements under one roof?
Very confused - which is why we keep putting off dealing with it

Any input gratefully received

Me and my Wife are in a similar situation, I've just turned 40 and my wife is a couple of years younger. We have three kids between the ages of 7 and 12. Neither of us have a will.

In addition I wonder at what stage do you consider planning for Inheritance tax? up to about a year ago we had little saved, ok about £50 but over the past year things have been good to me and I am able to save a decent figure each month.

I do remember someone once saying to me, its your hard earned cash, don't worry about leaving it for the kids as they can earn their own money. I do beleive that and when I retire I plan to make the most of my savings and enjoy life for as long as I can. BUT whatever is left I want my kids to get, not some man in a suit.

kirt_2

Having pondered for many years, we just manged to beat the chancellor by a few weeks, to set up a nil rate band discretionary will trust (at some cost)and transferred the property from joint tenants to tennants in common. We are now pondering whether we should undo this arrangement and how best to do so, or just wait in the hope that property values will keep rising to overtake the threshold limit.
We would welcome some wise counsel.

moon-pig_2

Hi Kirt,

We were in the same position as you. With discretionary trusts set up, between the first of us dying and the second of us, there would have been ongoing legal administration and accountancy issues that would have been quite costly.

Since married couples can transfer unused nil rate bands we decided that the later expense could be avoided, so we set up new Wills. I understand that our old wills can still be useful for unmarried couples and those with significant business assets but we don't fall into those groups.

As we already owned our property as tenants in common we could simply have made simple Wills leaving our estates to each other and for inheritance tax this would largely have the same effect as our old wills.

I was concerned however that once I had departed this earth my wife might remarry or wind up in a care home and I wanted to safeguard my children's inheritance from all that.

So instead we left our estates to the children, but gave each other a life interest (right to carry on living in the house until the second of us died). That way our house is safeguarded from care fees and it's tax efficient too.