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

John_Pierpoint

Ask the specific questionabout CGT in the tax saving part of this forum - the various formsof tax nd benefits don't form any part of joined up government - it is still organised for the benefit of the organisation not its "customers".

It used to be ok to own two principle private residences for 3 years without losing CGT "priveleges"; this was originally to allow time to sell the old one in a sticky market. I think that allowance has now been cut to 18 months.

There is also an allowance for renting out a ppr but one has to move back in again before selling.

So you ae playing about with the choices between 0% 40% & 28%

Daniel54

John_Pierpoint wrote: »

Ask the specific questionabout CGT in the tax saving part of this forum

This is the tax saving part of the forum,but agree the OP might get a better response by starting a new thread.

Assuming all four are currently living in the main property ,then the brothers' PRR will only date from their ownership.The amount assessable for CGT on sale of the property will for each brother be the difference between acquisition cost of £0 and 25% of the sale value (less share of mortgage) assuming the ownership is now evenly split,less any allowances

Regarding property two,even if in both brothers' names only,it is entirely likely that the parents would be deemed to have at least some beneficial ownership ,which would then be liable to IHT

http://www.hmrc.gov.uk/manuals/ihtmanual/ihtm04441.htm

As Getmore4less suggested,POAT rules/tax will also apply for properties two and three

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

There are others here more knowledgeable than I ,but all in all it seems like a scheme cooked up without the benefit of professional advice ,and all the more likely to end up being an expensive mistake

Mary_Hartnell

Both major parties seem to be offering an increase in CGT rates after the next election.

Fred_Gassit

Help - What is a Gift?

I am executor of my late mother's estate, and am trying to sort out the IHT.
I believe the estate is nil rate band, but I have a question regarding gifts.
In her last years my mum wasn't capable of managing her finances, so I got on-line access to her accounts and did it all for her.
This included paying certain bills with my own cheques, then reimbursing myself with a transfer from her account.
Does the tax man count this as a "gift" even though I was paying a bill for her?

Mojisola

Fred_Gassit wrote: »

This included paying certain bills with my own cheques, then reimbursing myself with a transfer from her account.
Does the tax man count this as a "gift" even though I was paying a bill for her?

No................

Imnoexpert_2

A friend has been advised when making a will to change the family home to tenants in common and take advantage of the "settlement nil rate band" a new provision. Friends - like me have assets over the joint iht thresholds with the family home being a large chunk of that. Aim is to pass dish to children and minimise iht.

I have googled it and found it hasn't happened yet. Friend says it will be a way of having an additional 'nil rate' allowance.

Can anyone out there help by giving me a simple explanation of what this is about and if it is suitable for a newly retired couple with a house and a couple of grown up kids. Also what is the likely cost and pitfalls?

karl60

My mother died recently leaving a substantial estate. Would it be possible to set up a charity for causes that were close to her heart and then vary the will so that the charity benefits rather than me/Mr Osborne?

Linton

karl60 wrote: »

My mother died recently leaving a substantial estate. Would it be possible to set up a charity for causes that were close to her heart and then vary the will so that the charity benefits rather than me/Mr Osborne?

A will can be changed by deed of variation if all affected beneficiaries agree. I dont see how you can give to charity to reduce the money going as tax without also reducing the money going to the beneficiaries, so whether they will agree may be an interesting question.

eg estate of £625K
No charities, £300K liable to tax, £120K tax: £505K to beneficiaries
£100K to charities, £200K liable to tax, £80k tax £445K to beneficiaries

zygurat789

Linton wrote: »

A will can be changed by deed of variation if all affected beneficiaries agree. I dont see how you can give to charity to reduce the money going as tax without also reducing the money going to the beneficiaries, so whether they will agree may be an interesting question.

eg estate of £625K
No charities, £300K liable to tax, £120K tax: £505K to beneficiaries
£100K to charities, £200K liable to tax, £80k tax £445K to beneficiaries

Where 10% or more of an estate is left to charity the IHT is payable at the reduced rate of 36%. So it has cost the beneficiaries £52K to give £100K for causes that were close to her heart.

SeekTruth

karl60 wrote: »

My mother died recently leaving a substantial estate. Would it be possible to set up a charity for causes that were close to her heart and then vary the will so that the charity benefits rather than me/Mr Osborne?

Very laudable.

What I don't understand is why you want to 'set up a charity'. This sounds unnecessarily complicated. If the 'causes close to her heart' are already charities then just make them beneficiaries directly of her will/Deed of Variation rather than paying via some new charity created for the purpose.