transferring inheritance after death

rosyposyjm

My father passed away last year and obviously left everything to my mother. There are various bonds, accounts and shares as well as the family home. I'm not sure on the total value. When we were getting the certificate of probate last year, the solicitor mentioned that my mum could transfer part of the inheritance into my name and it would be as if my dad had left it to me. I think she fears inheritance tax, ( but if I'm honest, I don't think she has enough to worry about that - but I don't know for sure) so she wants to do this with 50%of her house so the house will be in both our names. She will then continue to live there.
I just wondered what we would need to take into consideration when doing this and if you think we should do this.
Thanks in advance

CLAPTON

tax is about the FACTs

find them out in detail

getting them wrong could costs lots of money

how much would your mother's estate be worth: plus a rough break down

rosyposyjm

Have visited my mum and here is a breakdown:
shares £33k, bank ac/bonds/isas £350k; house £250k; private pension £7625 p/a before tax; state pension £841 p/m.

We used to have a joint bond of £80,000, but there was a bit of a mix up and when she renewed it, it was solely in her name and they wouldn't change it back to joint as it was a fixed term bond so that was quite annoying. We are planning on opening a new joint ac in december when another bond matures, but am assuming that this will have a seven year "gift" applied to it?

Mum is 67 and fit and healthy.

Think that is all the facts;)

I think she'll want to transfer half the house into my name for her peace of mind to avoid inheritance tax.

Are there any factors we should take into consideration when doing this?
Thank you,

kidmugsy

rosyposyjm wrote: »

shares £33k, bank ac/bonds/isas £350k; house £250k; private pension £7625 p/a before tax; state pension £841 p/m.

I think she'll want to transfer half the house into my name for her peace of mind to avoid inheritance tax.

i) It's rash to mess about with property, where all sorts of things can go wrong, when you could mess about with money instead, which is far easier to get right.

ii) At the mo', it looks as if she wouldn't be liable to IHT anyway, since (unless there is crucial info you've not mentioned) she should have none to pay on the first £325k x 2= £650k.

iii) Why not just have her repay to you the £40k she owes you over the joint bond mix-up? That'd keep her well clear of IHT.

rosyposyjm

Just thought - there are two accounts for my children "in trust", but with my mum's name on them - that's another £20k.

atush

What kind of accts? Cash or investments? Can you be the trustee now?

Obv the value of the house could go up, but cash is easier to muck abt with.

Can she live on 1476 per month with enough left over to save to fund upcoming expenses like maintenance and holidays?

rosyposyjm

They are fixed rate bonds.
Yes she manages fine on that much per month

xylophone

If the accounts are held in bare trust for the children, then the money belongs to them, not to your mother.

Any income arising is therefore taxable on them, not your mother.

Assuming that the children are non-taxpayers, R85s should have been registered on the accounts.

If it is desired to keep the accounts in bare trust after the children turn 16, any R85s will have to be cancelled and any overpaid tax reclaimed on form R40.

http://www.hmrc.gov.uk/trusts/types/bare.htm?usg=AFQjCNEf3QQKNlBVnJXXq5nME7xP2PuYBA&sa=X&ei=M1pQTcO3NtDTgAfngwQ&ved=0CB0QygQ

rosyposyjm

I don't think they're in bare Trust

atush

How old are the kids? Do they have CTFs or Jisas?

I'd think about when the bonds mature putting them into equities, or you be the new trustee?

rosyposyjm

Kids are 15 and 4. Both have a Jisa. 15 yr old has a CTF - I think - or it was an investment I set up and pay into monthly when she was a baby - Witan "Jump". Think 4 yr old has a CTF, but with just the money that the gov set it up with when he was born.
If I become the new trustee, would that be classed as my mum gifting the money to me? / the children?