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

betheebee

I am about to inherit £250,000 and would like to clear our 1st daughter's mortgage, about £80,000. Our second daughter is renting another house I own and would like to gift it to her. Would they be liable for gift tax? I really don't know where to start, any help greatly appreciated.

harryhound

Your apparently simple question raises at least a dozen issues:
Gift tax does not exist, it used to be called Capital Transfer Tax CTT and was abolished some considerable time ago (not back yet:rolleyes:).

Capital Gains Tax (CGT)?
Money laundering ? You are not but your bank does not know that!
Inheritance Tax (IHT)?
Legal relationships ? (eg are you married) .
Family relationships (will anyone else have their nose put out of joint?)
Are you likely to need to claim benefits following your disposal of capital?
Can you trust your children?

I would start by getting the latest books on Tax & Inheritance (Which? does a well written set).

Then if you feel you understand the complex arbitrary rules, start your own thread, giving lots of information about your personal circumstances.

Harry.

Badsaver

Hi,

I need a bit of advice if possible. 3 years ago, my Grandad bought me a house. When we wne to speak to the solicitor, it was decided that it would be 60% my grandads and 40% mine. ( i was only 19 at the time and he didnt want me selling it randomly (Like I would!!??)) It was also decided that upon the death of either myself or my grandad (whoever is first) the remaining percentage would be left to the other person. If my Grandad passes away before I do, would I be liable for any sort of tax? Or would I only incur this if I was to be left anything else?

Sorry if I seem a bit vague, I am struggling to understand the ins and outs of inheritance tax.

Thanks in advance

localhero

Your granddad's estate will face the liability (if any) of inheritance tax.

Whether there will be any will depend upon the value of his estate, whether he was widowed or not and who he left his estate to.

fraser

hi

my grandmother passed away recently and we had done a bit of IHT planning.

Part of this is to use my grandfathers IHT allowance which was 300k at the time of his death. (Able to use as his will proves no use of his allowance as he passed all his assets to his wife)

Question is what is the total of the 2 allowances?

Is it still 300k for my grandfather and 312k for my grandmother = 612k ?

or is it now 312k and 312k? i.e. 624k?

sloughflint

£624 000..........

PvyBaldrick

First post. Long time lerker though on these excellent forums.

I'm trying to help my father plan his inheritance & he is trying to avoid tax (long history of moneysaving in his family)

He is selling his home and going into sheltered housing. He has a decent pension and can manage well day to day financially.

His estate is under £300k so in theory not liable to IHT?

His plan is...
Give some money to the kids (there are 4 of us). This is now before he passes on. His words are "he wants to see the money getting some use".
Keep the majority for a rainy day. (Get an small income from it etc.)
Spend some on himself. (New golf clubs etc.)

A financial advisor said all he could give to other people is £3k a year without being liable for Inheritance tax. However with the small estate does this count?

The rules on 'Potentially exempt transfers' say you can give any amount tax free so long as he lives for another 7 years. If he doesn't then it is liable for IHT. Again with his estate being under £300k does this count?

I'm basically asking with an estate of under £300k does he have to worry about Inheritance tax either before or after he dies?

Balders

jem16

PvyBaldrick wrote: »

I'm basically asking with an estate of under £300k does he have to worry about Inheritance tax either before or after he dies?

Balders

No need to worry if you are sure his total estate is under £300k.

margaretclare

....and here's someone else with a view of the matter: http://www.h-l.co.uk/news_and_expert_views/feature_articles/articles/060/rq/article.hl

sloughflint

margaretclare wrote: »

....and here's someone else with a view of the matter: http://www.h-l.co.uk/news_and_expert_views/feature_articles/articles/060/rq/article.hl

The article mentions:

– it has to be claimed retrospectively by the executors of your estate

....A very simple form:
http://www.hmrc.gov.uk/cto/forms/d03a_1.pdf