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

John_Pierpoint

My initial reaction was - this could turn out to be incredibly complex and there is a whole lot of reading round the subject that I think you still need to do.

One possibility would have perhaps been leaving an interest in possession trust to your widow for her life (say 15 years) and then to you two children - if they can wait that long. [On my own family there was such a bequest to someone who was thought to be "sickly" who ended up very nearly getting a telegram from the Queen]

Something was niggling at the back of my mind and I think I have found it:

Spouse or civil partner exemption

Gifts made between spouses or civil partners are exempt from inheritance tax. This exemption is limited to £55,000 if the deceased (or donor) was domiciled in the UK and their spouse or civil partner was not domiciled in the UK at the time of the transfer.

taken together with this I think it will blow the idea out of the water?

I would imagine, as she would wish to return to her own home in Europe.

[I do know of a "deathbed marriage of convenience" that did work, as the surviving "husband" gifted the assets and then survived 7 years - you do need to take into account the laws of the country of "domicile" of your lady friend]

raza_2

A big thank you for your responses to my questions. It seems it is not as simple as I thought so it's back to the drawing board for other ideas, plus investigating trusts in detail.

Any ideas where I can go to obtain info on the various Trusts that might be suitable?

Many thanks for your advice.

Raza.

Mike_4715

It makes me so angry that we be taxed on what has already been taxed!

grey_gym_sock

Mike_4715 wrote: »

It makes me so angry that we be taxed on what has already been taxed!

please stay on topic. this forum is for practical information about minimizing tax, not complaining about it.

getmore4less

raza wrote: »

A big thank you for your responses to my questions. It seems it is not as simple as I thought so it's back to the drawing board for other ideas, plus investigating trusts in detail.

Any ideas where I can go to obtain info on the various Trusts that might be suitable?

Many thanks for your advice.

Raza.

I have not yet tried to wade through the compexities of trusts

Could start with the basics on HMRC and books from the library, at least that way when you come to getting paid advice you might have a chance of understanding what they are talking about, I know it would take me a few hours research to get through the basics.

http://www.hmrc.gov.uk/trusts/index.htm

your complexity also includes potentialy a non domiciled partner.

dzug1

raza wrote: »

I am reluctant to appoint a solicitor as my executive, but I fear my two eldest children would find the stress of administering my will too much for them, even though they will get the majority. Is there anything like an"Executor" advisory service they could call on if necessary for advice and guidance, at reasonable cost, to assist them to administer my will? My youngest who already has received a large portion of his share, is capable of doing it, but I fear he may disagree with my wishes and siphon of what he thinks is a fairer amount for him. .

If what you are saying is that your youngest is dishonest and the elder two incapable then you have little choice but to appoint either a professional or a friend from outside the family.

If the eldest do it they could consult a solicitor for the bits on which they lack confidence - or all of it if it comes to it. Maybe better than naming a specific solicitor

sleepless_saver

Does anyone know how money given to student offspring to support them during studies is taken into account for IHT purposes? Is it a gift or something else?

I've had a look on HMRC website but can't find an answer.

getmore4less

sleepless_saver wrote: »

Does anyone know how money given to student offspring to support them during studies is taken into account for IHT purposes? Is it a gift or something else?

I've had a look on HMRC website but can't find an answer.

Probably comes under paying for things for dependants.

eg: If you pay for a kids holiday it does not count so when(age/circumstances) does that change?

page 16 of the following has some links that might lead somewhere
http://www.hmrc.gov.uk/agents/toolkits/iht.pdf

sleepless_saver

getmore4less wrote: »

Probably comes under paying for things for dependants.

eg: If you pay for a kids holiday it does not count so when(age/circumstances) does that change?

page 16 of the following has some links that might lead somewhere
http://www.hmrc.gov.uk/agents/toolkits/iht.pdf

Got it now, thanks. http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm

jackhan_2

My mother has just sold her house for around £165k and she is planning to share the proceeds of the sale thus: £40k each to myself and my brother and £15k each to 3 grandchildren. Am I right in assuming there are no tax issues ahead of us? I've done some research and concluded it's too clear cut to be true. Thank you in lieu of legal advice.