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

mskhan85

Hi I have a simple question.

In respect of POAT...

Does the market rent have to be

a) the full rental for the property....
b) The rental for 1 person (ie the person deriving the benefit) living in the property....

Thansk in advance...

mskhan85

Just bumping this

Would love to know...

Willman_Rodders

I think you should find your answer here ...

http://www.hmrc.gov.uk/poa/poa_guidance5.htm

and in particular in example 2 if I understand your question correctly.

degs

When my parents moved house in 1996 my sister and I helped them out by putting £4000 in the pot. The purchase was £65,000 and the deeds were in mine and my sisters names. Another contract was draw up and signed saying that my parents could stay in the house as long as they lived. Sadly both have passed away and my sister and I want to sell the property ( approx £180,00000) What tax are we liable for as although the house was gifted my parents didn't pay any rent.
Cheers Degs.

teris

I would love to have some advise.
My husband & I both own a property each, our sole names.
We've been advised by a Fin Advisor to do tenants in common on both properties and create a family trust so to protect us from IH tax if the other dies. However I don't likre the sound of putting a complete stranger as a trustee and legally an owner of the trust.
I've been looking at trusts but there are so many different kinds. Any ideas?

John_Pierpoint

What is the value of each house?.
Which one is your principal private residence?
Any mortgages or other debts?
What is the "net worth" of each of you?
Do you have any dependents?
Do you have any descendants?
How old are both of you?
Are there any restrictions on the properties? and advantages? (eg part of a farm).
What state of health do you both enjoy.
What has become of your own parents?
Any prospects of acquiring wealth before you die?
Does the wealth of the first to die need protecting from the survivor?
As you cannot take it with you how do you see the combined wealth being settled on the second death?

There are some thought starters.

There are lots more questions that could be asked, based on the answers to the above.

Banton

Hi there, I'm in need of some desperate help. My mum passed away recently and in her will she left the total sum of her assets to myself and my 5 brothers.

Being new to this, we found that that the sum of her assets following her passing is in excess of £500,000. We are now worried because it seems that we will have to find nearly £60,000 in IHT which none of us can afford.

Given that my mum has passed alot of the comments on this forum won't help. Can anyone offer any advice on reducing IHT once my mum has passed. FYI she was divorced

propertytaz

Quick initial reply.

I am also looking for information - a property has been left to family members - and IHTax may well be substantial - £40,000 - £60,000. I am trying to value the Estate at a 'reasonable' figure for IHTax purposes, and via a Solicitor.

I am going to see if substantial repairs and improvements which are necessary, can in some way be exempted from the IHTax, and also the 'valuation' of the property is rather high [in my opinion] and thus I am going to see if I can start at maybe the 'Rateable Valuation' [or its 'value' in 2005 for NI]

There *may* be some manoeuvre in the 'Valuation' depending on who is doing the Valuations, the amount of repairs etc., which a 'prudent purchaser, properly advised' would take into account in any 'offer' they may make, in this uncertain, and probably to fall further, [much further] market.

Especially since in the first instance we are not going to be selling the property, and maybe not for 5 years or so, if at all.

I have 'searched' various sources on the internet to help in my quest.

Also it may be possible to offer an initial 10% of the IHTax, to obtain 'Probate', until such time as you do sell the property, and even then it may be possible to make the full payments over 1-5-10 years [yet to check this]

Finally there is also a potential problem, if not selling the property, as to the 'ownership' for the remaining family members - should it be 'joint tenants' or 'tenants in common' [not sure of the legal differences yet], and then one member might well offer to buy it at a 'much reduced selling price' in order to keep it in the family, and this lower price then gets equally distributed to the other members - however if that member should die, then the problem of IHTax may re-surface - hence the need for further legal advice now.

dzug1

Banton wrote: »

Hi there, I'm in need of some desperate help. My mum passed away recently and in her will she left the total sum of her assets to myself and my 5 brothers.

Being new to this, we found that that the sum of her assets following her passing is in excess of £500,000. We are now worried because it seems that we will have to find nearly £60,000 in IHT which none of us can afford.

Given that my mum has passed alot of the comments on this forum won't help. Can anyone offer any advice on reducing IHT once my mum has passed. FYI she was divorced

One or more of the banks she used will probably release the money to pay IHT. National Savings certainly will if she had any. At worse the estate can get a loan.

I can't see any way of reducing IHT, unless you all agree to a Deed of Variation and leave £150K to charity

shortchanged_2

Banton wrote: »

Hi there, I'm in need of some desperate help. My mum passed away recently and in her will she left the total sum of her assets to myself and my 5 brothers.

Being new to this, we found that that the sum of her assets following her passing is in excess of £500,000. We are now worried because it seems that we will have to find nearly £60,000 in IHT which none of us can afford.

Given that my mum has passed alot of the comments on this forum won't help. Can anyone offer any advice on reducing IHT once my mum has passed. FYI she was divorced

Your post sounds a bit confused. Firstly your saying your mum has passed away, then in your final paragraph you are asking for advice on reducing IHT once your mum has passed.

I don't really understand how you can't afford to pay the IHT. Usually the IHT will be sorted out from the legal side before any money or assets are distributed, therefore I don't understand why it would be unaffordable for you.