Inheritance Tax

fred246

I am just filling in an inheritance tax form online and I wondered if anyone could help.
I have got an OEIC and a Friends Life Bond. I didn't take them out and I don't know much about them.
I have 3 categories - money, stocks & shares and insurance policies. Which category do they fit best? Thanks.

xylophone

https://www.moneyadviceservice.org.uk/en/articles/unit-trusts-and-open-ended-investment-companies-oeics

Stocks and Shares.

Friends Life - is this the portfolio bond? This is an insurance based investment product.

See box 37

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/606055/IHT400Notes.pdf

fred246

Thanks for that. The Friends Life Bond is called a Friends Life Distribution. It does say at the bottom "In the event of any death claim we would pay 101% of the bid price of your units." He put in £10000 in 1990 and has grown to £47000. It just seems like more of an investment product than an insurance one.

kidmugsy

fred246 wrote: »

It just seems like more of an investment product than an insurance one.

In olden times there were advantages in disguising an investment product as an insurance product.

fred246

OK so no inheritance tax to pay but what about capital gains tax? With the OEIC it seems to say we can inherit the OEIC but if we cash it in we are liable for capital gains tax. Can we keep the OEIC for years and then transfer it into an ISA when we have unused allowance? It's a nightmare trying to sort the finances out that someone else has left you. It could have been transferred into an ISA years ago.

Linton

When you sell the inherited OIEC you will be liable for CGT for the increase in value between when you inherited and when you sold. Since you have an £11300 CGT allowance you should be able to sell the lot fairly quickly or in many years time in tranches over several years without any tax being due and transfer the money into an S&S ISA.

fred246

Thanks for the reply Linton. There are 2 of us inheriting a £30k OEIC. We are not over the inheritance tax threshold so pay no inheritance tax. Do the company split the units for us? We have an OEIC that we can keep indefinitely?but when we sell we pay CGT if current value - inheritance value is greater than £11300. Surely we would have to keep them for years to get to that position?