Elderly executors

loulou41

Keep_pedalling wrote: »

Contents is fairly simple, just put a nominal value on the lot.

Gifting requires good record keeping. Gifts out of income are exempt, but you need to be careful with those, because you can't for instance gift £12k from income and in the same year draw £20k from savings to go on a world cruise or buy a new car and claim exemption on the gift because it is not surplus income. You could, under those circumstances, however claim £3k from your annual gift allowance (£6k for a couple).

Does this scenario make sense to anybody. Scenario for elderly couple. Property worth £300,000 tenants in common with life interest trust for surviving spouse beneficiaries two adults children. Annual gifts to grandchild £12,000 and £2000 for adult children. Smaller gifts of £250 to families. Need to know the following pl.

Husband died his £150,000 share of property go in trust . Will this £150,000 be included for hit for assessment?

He gifted £12000 annually to grandson out of income. £2000. to adult children. Total of £14,000 a year. His nil band rate is £325,000. Scenario is half share of house is £150,000 , gifts of £14,000 a year for 7 yrs £98,000. He was allowed £3000 a year for 7 yrs that's £21000. So if I understand how it works it will 150k+98+=248k - 21k=227. I have included the 14k out of income to be on the safe side. So he can pass to surviving spouse his nil band rate of 98k. Hope somebody understand my post and it is not too confusing . Thanks

loulou41

Yorkshireman99 wrote: »

As executor you can still appoint a solicitor to take of the job.

It will be a very straight forward property trust wills. How much does a solicitor charge? Everything is documented and bank affairs in order and how to access infor might only need help to fill iht205. Just doing a practice run for myself and daughter as somebody suggested. As I have got plenty free time I am trying to get as much infor on this subject it is an issue families are not very keen to discuss is there a website where I could access some forms to print for record keeping. Thanks

Keep_pedalling

loulou41 wrote: »

Does this scenario make sense to anybody. Scenario for elderly couple. Property worth £300,000 tenants in common with life interest trust for surviving spouse beneficiaries two adults children. Annual gifts to grandchild £12,000 and £2000 for adult children. Smaller gifts of £250 to families. Need to know the following pl.

Husband died his £150,000 share of property go in trust . Will this £150,000 be included for hit for assessment?

He gifted £12000 annually to grandson out of income. £2000. to adult children. Total of £14,000 a year. His nil band rate is £325,000. Scenario is half share of house is £150,000 , gifts of £14,000 a year for 7 yrs £98,000. He was allowed £3000 a year for 7 yrs that's £21000. So if I understand how it works it will 150k+98+=248k - 21k=227. I have included the 14k out of income to be on the safe side. So he can pass to surviving spouse his nil band rate of 98k. Hope somebody understand my post and it is not too confusing . Thanks

What about his savings? surely someone giving that much away, had something put by for emergencies at least. On the other hand you have not included his main residence nil rate band in your calculations.

https://www.gov.uk/government/publications/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band

loulou41

Keep_pedalling wrote: »

What about his savings? surely someone giving that much away, had something put by for emergencies at least. On the other hand you have not included his main residence nil rate band in your calculations.

https://www.gov.uk/government/publications/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band

About 50k in shares,bonds and savings. He is not keeping more that than and any surplus income from two pensions go to adult children and grandson. He likes to live this way no expensive holidays, expensive treats so that the extra income go to grandchild. He has two options splashing the extra income on himself or help his grandchild's future. The residence nil band rate will be 50k for his share. Even if he declares everything he will not go above 375k. Thanks for your advice.

Yorkshireman99

loulou41 wrote: »

About 50k in shares,bonds and savings. He is not keeping more that than and any surplus income from two pensions go to adult children and grandson. He likes to live this way no expensive holidays, expensive treats so that the extra income go to grandchild. He has two options splashing the extra income on himself or help his grandchild's future. The residence nil band rate will be 50k for his share. Even if he declares everything he will not go above 375k. Thanks for your advice.

It is important that accurate records are kept of the gifts so that life is made easier for the executors.

getmore4less

THe real issue with all the non exempot gifts is they use up a bit of nil rate band, if everything else goes to spouse(including the stuff in the life interest trust) then it gets the spouse exemption and the spouse get any unused nil rate band to go with it the value of the house in the trust will be included in the second death.

the current joint nil rate band with residential(£100k EACH) is £850k and will grow to £1million as the residential rises each April.

If the total of current assets and non exempt gift in the last 7 years are below this it becomes a paper exercise to make sure everything is within the limits

Keep working through the IHT 205 read the notes and also read all the IHT400 pages and notes.

it will become clearer with some time and you will probably end up with a pair of fairly simple estates to deal with.