Inheritance Tax changes

Mattygroves2

fartington wrote: »

I need advise

My mum has already downsized recently and the cash is in UK and she is in a flat abroad now. So is this cash taxable over 325 or 500?

will wait til this afternoon, but will still be confused probably, as my case is different to the norm.......

Downsizing only applies if it happens post 8 July 2015.

Glad to see step children included as direct descendants.

Mattygroves2

However wrote: »

The way it's gone for 60 years since marriage, I happen to own the house 100%.
So, my wife after 60 years of marriage dies first.


Does her £175K allowance get transferred to me? Or not?


If not, I will have to go through the rigmarole and expense of transferring the house into joint names to trigger the £175K allowance (worth, ultimately, £70K to our children) so that it can be transferred back again (at more expense).


And if it comes to downsizing, going into care, etc etc, I had better do that transfer before that happens, otherwise presumably only 'my' £175K gets 'reserved' rather than 'our' £350K.


I hope the younger generation, including those now in government, hasn't forgotten that in years gone by it was only the working-spouse who was able to get the mortgage, thus most houses were owned by the working-spouse only.

You'll need to get the property transferred into both names I think and then her allowance will transfer to you. Very cheap as it is just a Land Registry form and a small fee. It's always been the case that arranging things to minimise IHT has cost money - you weigh the costs now against potential tax savings later on.

jennifernil

However wrote: »

The way it's gone for 60 years since marriage, I happen to own the house 100%.
So, my wife after 60 years of marriage dies first.


Does her £175K allowance get transferred to me? Or not?


If not, I will have to go through the rigmarole and expense of transferring the house into joint names to trigger the £175K allowance (worth, ultimately, £70K to our children) so that it can be transferred back again (at more expense).


And if it comes to downsizing, going into care, etc etc, I had better do that transfer before that happens, otherwise presumably only 'my' £175K gets 'reserved' rather than 'our' £350K.


I hope the younger generation, including those now in government, hasn't forgotten that in years gone by it was only the working-spouse who was able to get the mortgage, thus most houses were owned by the working-spouse only.

Most odd, even my parents, Dad born 1910 and Mum born 1923 owned their house jointly.

My Mum did not have any earnings when they bought it in 1953.

cavyslave

Oh I'm confused! My elderly brother-in-law who is single has bequeathed his entire estate to me and my son. Assuming he lives long enough for the new rules to apply, what IHT would be due?

zygurat789

cavyslave wrote: »

Oh I'm confused! My elderly brother-in-law who is single has bequeathed his entire estate to me and my son. Assuming he lives long enough for the new rules to apply, what IHT would be due?

When will he die and how much will his estate be worth when he does?

[Deleted User]

It looks as though the full new iht allowance would be transferred to a pre-existing widow/widower

See mrs smith down the page
http://www.which.co.uk/news/2015/07/summer-budget-2015-inheritance-tax-boost-407896/

That would be good news. It wouldn`t affect my house but good news for many and there is always future house price inflation which would be accommodated. It also makes adding value to the house worth while

Mattygroves2

kittie wrote: »

It looks as though the full new iht allowance would be transferred to a pre-existing widow/widower

See mrs smith down the page
http://www.which.co.uk/news/2015/07/summer-budget-2015-inheritance-tax-boost-407896/

That would be good news. It wouldn`t affect my house but good news for many and there is always future house price inflation which would be accommodated. It also makes adding value to the house worth while

The first person to die still has to have a share in the house worth more than £175,000 though or the allowance will be lost.

Mattygroves2

cavyslave wrote: »

Oh I'm confused! My elderly brother-in-law who is single has bequeathed his entire estate to me and my son. Assuming he lives long enough for the new rules to apply, what IHT would be due?

As you aren't a direct descendant the new allowance will make no difference to you as it currently stands.

getmore4less

I still need to look at the legislation to see what the changes really mean.

Surprised by this in the article.

Although the Chancellor's announcement will eventually remove an estimated 20,000 estates from IHT each year,

The data for 2012 show under 16k estates paying IHT and under £1m around 12k.

The number getting taxed used to be a lot higher the Transferable nil rate band and the rise took 325k to around 1/2 of the estates out of IHT.

getmore4less

Mattygroves2 wrote: »

The first person to die still has to have a share in the house worth more than £175,000 though or the allowance will be lost.

If it works the same as the current transferable allowance then it will be the amount available at the time it is used(second death).