administrator- but not next of kin

GDB2222

Yorkshireman99 wrote: »

This sounds plausible and don't doubt what you have been told by a STEP member. However, HMR&C are very hot on schemes contrived to circumvent the rules and the tax inplications could be costly. Any executor whom decides to do this needs a written guarantee from their professional advisor that the scheme is legal and effective. It does seem to be straying way outside the responsibilities of the executor. Fascinating idea though!

It is, indeed, outside the responsibilities of the executor, as he has nothing to do with it. The DOV is drawn up by the beneficiaries.

No professional adviser is going to give a guarantee. They give advice. The clue is in the name, actually.

Yorkshireman99

GDB2222 wrote: »

It is, indeed, outside the responsibilities of the executor, as he has nothing to do with it. The DOV is drawn up by the beneficiaries.

No professional adviser is going to give a guarantee. They give advice. The clue is in the name, actually.

The executor does have to distribute the estate assets. As such they are going to be involved. Any prudent executor would need to be very sure that they are acting correctly in paying the funds to such a scheme.

getmore4less

Yorkshireman99 wrote: »

The executor does have to distribute the estate assets. As such they are going to be involved. Any prudent executor would need to be very sure that they are acting correctly in paying the funds to such a scheme.

They(admin) don't need to get involved at all it is nothing to do with them unless it changes the tax status of the estate they are dealing with. if they do want to get involved the only thing they do need is instruction from the beneficiary to say where to send the assets.

Admin can deliver to the normal beneficiary and they can then pass them or even wait upto 2 years(from DOD) when they do the DOV.

DOV just make gifts of assets received by way of an estate tax more efficient.

DigForVictory

I'm pretty sure your brother didn't anticipate landing you with the challenge of keeping large sums of money out of the hands of potentially fiscally reckless 18 year olds, but having died without a Will, that is where you are.

If you decide not to wrestle with trusts, noone will blame you but if the children do go on to do stupid things, very few onlookers will have the courtesy to blame their father for dying intestate. Amidst your current grief, I fear there will be further squalls ahead no matter what you do, so you may as well please yourself - but do please try not to hand Too Much yourself over to the legal profession.

The children may need to but that would be as a consequence of their problems, not yours.
Best of luck!

Alter_ego

Anyone thought about the new Probate fees? Might be an idea to get a move on with this.

Yorkshireman99

getmore4less wrote: »

They(admin) don't need to get involved at all it is nothing to do with them unless it changes the tax status of the estate they are dealing with. if they do want to get involved the only thing they do need is instruction from the beneficiary to say where to send the assets.

Admin can deliver to the normal beneficiary and they can then pass them or even wait upto 2 years(from DOD) when they do the DOV.

DOV just make gifts of assets received by way of an estate tax more efficient.

Does that mean that the funds are not then treated as a gift from the person who was originally paid.

SevenOfNine

Yorkshireman99 wrote: »

Does that mean that the funds are not then treated as a gift from the person who was originally paid.

Yes it means exactly that.

A basic oultline being the administrator distributes the estate in accordance with the intestate route. Job done. A subsequent DoV does not involve them as estate administrator, their responsibility has been completed.

The beneficiary can arrange a DoV within 2 years of DoD so the funds they received (or asset) pass to someone else (or into a trust). The funds are not a 'gift' from them as initial beneficiary, they are considered NOT to have inherited in the first place.

Not sure if the Change a Will After Death (applies intestate as well) on the GOV.UK site would clarify it for you further, but for sure the Trusts and Taxes section of the same website will outline a Discretionary Trust for you.

getmore4less

I think the use of "changes the will" in a lot of places is used because it describes the concept in a way that most people can understand.
But that can lead to the wrong interpretations.


a good guide
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/373615/IOV2.pdf

and the actual law for IHT
http://www.legislation.gov.uk/ukpga/1984/51/section/142

the key bit.

instrument in writing made by the persons or any of the persons who benefit or would benefit under the dispositions, this Act shall apply as if the variation had been effected by the deceased or, as the case may be, the disclaimed benefit had never been conferred.

I will leave it to the reader to find the relevant CGT laws

edit:
so to clarify, the variation does not change a will, the gift still comes from the beneficiary but for IHT and CGT purposes it is as if the gift came from the deceased. Disclaimer is slightly different

A variation can be made after 2 years just has no impact on the tax position.

Yorkshireman99

getmore4less wrote: »

I think the use of "changes the will" in a lot of places is used because it describes the concept in a way that most people can understand.
But that can lead to the wrong interpretations.


a good guide
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/373615/IOV2.pdf

and the actual law for IHT
http://www.legislation.gov.uk/ukpga/1984/51/section/142

the key bit.



I will leave it to the reader to find the relevant CGT laws

edit:
so to clarify, the variation does not change a will, the gift still comes from the beneficiary but for IHT and CGT purposes it is as if the gift came from the deceased. Disclaimer is slightly different

A variation can be made after 2 years just has no impact on the tax position.

With the exception of means tested benefits!