Inheritance Tax for Single and Childless

JaneDorset

Hi there
This is my first attempt so please bare with me! I am currently single and childless. I would like to draw up a will that gives my parents most of my money however I would like to leave something in trust for my nephews and nieces and 10% to charity. Can anyone suggest how to best to help my parents avoid paying inheritance tax (assets will be over the £325k threshold) and secondly do I need to write actual amounts per person or can I divide it up by percent ie parent get 50% of the estate? Any advice would be most appreciated.

poppystar

IHT is not paid on gifts to charity so work out the approximate value of your estate and gift absolute sums, e.g. £20000 to x charity, until you get down to the threshold. This may mean giving more than your 10% or less depending on how rich you are.

It's perfectly possible for the remainder of your estate to express it in percentage terms.

The 'in trust' bit someone with more knowledge will I'm sure be along soon.

Yorkshireman99

Go and see a solicitor who is a STEP member, not a will writer, and get advice. There are a all sorts of options. You can leave percentages and in many ways that is better than amounts in £. IHT is payable by the estate not the beneficiary.

Malthusian

poppystar wrote: »

IHT is not paid on gifts to charity so work out the approximate value of your estate and gift absolute sums, e.g. £20000 to x charity, until you get down to the threshold.

I assume the 10% figure is because the OP wants to benefit from the 10% Inheritance Tax discount if 10% is left to charity. In which case a percentage may be more desirable, as if you write a Will when your assets are £1 million and you leave £100k to charity, that will be less than 10% of your estate when you die, due to inflation.

Are your parents likely to need your money? If they don't, the best way to avoid unnecessary inheritance tax may be to not give them unnecessary assets. If your money would sit in their estate and eventually make its way into the hands of their beneficiaries, you could simply give it to those beneficiaries directly (the nieces/nephews?) and avoid it being subject to IHT twice. However this is a very open-ended question and YM is correct that you should take professional advice.

Keep_pedalling

As has been said your parents would not pay IHT, that would come out if your estate. Leaving the bulk of your estate to them however may in tern give them the issue of IHT as this would increase the value of their estate considerably.

Do you have reason to think you are likely to predecease your parents?