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

parkersages

There seem to be some knowledgable souls on here, so i wonder if anyone can tell me "can a family discretionary trust, set up 8 years ago so free from IHT implications, accept a short term loan to help it bridge a period whilst it reorganises it's investments. It is almost a full time job finding financial institutions that will accept deposits from trusts and which offer a reasonable return, so careful planning to optimise returns is essential Thanks in anticipation

John_Pierpoint

In case you have not noticed - tonight (Monday) at 20:30 on BBC1 Panorama explores the un-regulated market in writing wills.
(A bit like the situation with Estate Agents a few years ago).
The programme is repeated on "Thursday" (Actually Friday) at 01:10 for the hard of hearing. No doubt it will also be available on iPlayer too.

Remember TV companies need to entertain as well as inform.

There has just been a trailer on the radio that featured comments for Which?, where a mystery shopper exercise has recently been reported.

The Which? verdict was that Solicitors were best, Will Writers were "patchy" and banks were likely to insist on collecting 1,000's of pounds from the estate, when the testator died. (for work involving a large input by the bereaved). See the anti Barclays thread.

The "Which" representative went on to say that the consumer was at a disadvantage, "as they only buy one will". In fact 2/3rds of people never buy at all and die intestate. The real advice should be - as soon as you have someone else to care about, it may not be appropriate for you "wealth" to go backwards to your mum and dad. So make your first will. THEN KEEP IT UP TO DATE for the rest of your life.
This involves keeping your ear to the ground, to realise when the ever changing laws and taxes make your will no longer appropriate.
As well as the passage of time changing those for whom you feel some responsibility.

Finally before the Solicitors reading this feel too self satisfied, my personal experience is 2 years of struggle with a partially intestate will, created by "school boy" mistakes made by a solicitor; together with a wife who has a relative with a will appropriate in 2000 when made, but made inappropriate by changes to trust legislation (2006) and the introduction of the transferable nil rate band for Inheritance Tax (IHT) in October 2007.
Coincidently, the solicitors who created the latter will want a 4 figure sum to create an IoV (sometimes called a DOV or deed of variation) to update the will, after death together with a percentage of the half a million estate that would put them into banking territory.

I am amazed that solicitors don't telephone their clients to say "The latest budget makes part of you will inappropriate - we recommend you change .............

I would have thought that would be a nice little earner for them.

John.

PS: The two organisations that caused me the most delays were HMRC (Income Tax Section) and Barclays bank.

Over work & incompetence respectively I think

Barclays gets a special mention here:

http://forums.moneysavingexpert.com/showthread.php?t=1935955

Thanks for the heads-up. The posts that I and another contributors have previously added regarding things "moving along" (but have not been able to disclose) include the making of this programme. I hope that all contributors are able to watch tonight as it should include some of the problems recorded on this thread. Although it probably won't mention ITC directly, It should be well worth watching, I hope.

K_Strauss

There is a way to completely mitigate against Inheritance Tax and Capital Gains Tax, all through the one vehicle. This would mostly be of benefit to those with a combined estate exceeding £1,000,000 but inclusive of all assets, liquid funds and pension funds. I would be more than happy to enter into correspondence on this if it can be of help to anyone.

voiceover

Mother's husband died 21 years ago. When mother dies will there still be some tax free allowance from him to be added to her nil rate band?

jem16

voiceover wrote: »

Mother's husband died 21 years ago. When mother dies will there still be some tax free allowance from him to be added to her nil rate band?

If none of the nil rate band was used 21 years, your mother will have 2 times nil rate bands at the time of her death.

voiceover

Thanks Jem16, but would it be today's nil rate band that is added to her own, making 625k exempt, or would it be the nil rate band from 1989 (whatever that was) that would be added to her 325k allowance?
Added complication; he left a bundle of shares in trust to his nephews with income from trust going to mother until her death. Would that mean the shares valuation goes against his allowance on mother's death?
Maybe this should be one for the experts!

Willman_Rodders

Voiceover,

I think you'll find your answers here ...

http://www.hmrc.gov.uk/inheritancetax/intro/transfer-threshold.htm

jubilee05

:beer:
just a quick question,if my parents total estate is well under the IHT threshold,does this mean they can give away cash gifts of any figure anytime above the yearly £3000 without fear of us paying IHT if they were to not survive the 7 year time period?
if this is not possible can both parents give away £3000 each?

dzug1

jubilee05 wrote: »

:beer:
just a quick question,if my parents total estate is well under the IHT threshold,does this mean they can give away cash gifts of any figure anytime above the yearly £3000 without fear of us paying IHT if they were to not survive the 7 year time period?
if this is not possible can both parents give away £3000 each?

From the IHT point of view they can give away what they like. If their estates are less than the threshold there's no IHT involved.

However there's still the deprivation of assets/care home fees isue

travis

Hi all

If my parents have a house that is worth 600k. Is it better for them to give half each to me and my brother or just give the whole thing over to one of us?