IHT Family Holiday.

TracyC

I have been diagnosed as terminally Ill, with a life expectancy of six months. I own my own home, I have no other money nor assets except my home, It is worth more than the IHT threshold. I would like to take my family on holiday and pay for them and a carer to take care of me whilst I'm away. Can I take out a loan to do this against my home and will the cost of the holiday be subject to IHT. Thanks T

xylophone

How old are you? Is the house mortgaged? If not would your bank make a secured loan?

Do you have a pension that you could access under the rules for terminal illness?

With regard to IHT, if you did not use your gift allowance last year and have not used it this year, you have £6000 to play with for the gift of the holiday?

https://www.gov.uk/inheritance-tax/overview

kidmugsy

xylophone wrote: »

How old are you? Is the house mortgaged? If not would your bank make a secured loan?

Do you have a pension that you could access under the rules for terminal illness?

With regard to IHT, if you did not use your gift allowance last year and have not used it this year, you have £6000 to play with for the gift of the holiday?

https://www.gov.uk/inheritance-tax/overview

Plus £250 for each person who didn't receive the 2x£3k.

Are you by any chance a widow? If so, can you use your late husband's IHT nil rate band too?

Keep_pedalling

As for IHT, I think it depends on what sort of holiday. If you are paying for their flights and hotel rooms that almost certainly counts as a gift. If on the other hand you rent out a nice villa with spare rooms, and they make their own travel arrangements and stay with you as guests then I don't think that would be seen as such, at least I hope so as that is exactly what we are currently doing.

I think it would also that in the scenario that if you need travelling companions as carers then that should be seen as a legitimate expense, rather than a gift, providing that there are not large numbers of them.

purdyoaten

Keep_pedalling wrote: »

As for IHT, I think it depends on what sort of holiday. If you are paying for their flights and hotel rooms that almost certainly counts as a gift. If on the other hand you rent out a nice villa with spare rooms, and they make their own travel arrangements and stay with you as guests then I don't think that would be seen as such, at least I hope so as that is exactly what we are currently doing.

I think it would also that in the scenario that if you need travelling companions as carers then that should be seen as a legitimate expense, rather than a gift, providing that there are not large numbers of them.

Even if this was to constitute a gift, and I have doubts on this, would the taking out of the loan not offset this as it is a debt of the estate?

I don't actually know the answer but it seems reasonable to me!

Morganic

My understanding is that a holiday can avoid being construed as a gift as long as the donor goes on the trip too. In other words, if you take your intended beneficiary on a world cruise and you pay for his ticket, it doesn't count as a gift. But if you pay for them to go alone, then it would be.

The reason is that it is in the nature of a gift that the donor gets no consideration. But in this case, there is a consideration - you get the company of the other person

Same goes for other acts of generosity. It would be ridiculous if taking you out to dinner counted as a gift, and I don't think anyone would document such an act of generosity as a gift in probate. But, again, be sure to attend the dinner yourself.