New Inheritance Tax threshold for couples

Somerset

Can I post a specific question here :

My father died 1987. He was intestate so everything to my mother. Estate amounted to maybe 6K. So when my mother dies is her estate 'tax free allowance' a) 600K b) 300K + father's allowance in 1987 ?

Also after probate, she transferred a small piece of land to me which he had left to her ( value 2K then ) - will that complicate anything ?

Thanks

Tiggs_2

sloughflint wrote: »

Many further down the road won't be able to.


I was just saying that I'm uncomfortable with the idea of gifting to the kids now

Anyone with a DWT already can use the that Will but skip the DWT bit at the time of first death - still works, its just overly complex. I expect many of my clients will revert to simpler Wills but only because we do not charge for Will writing (theres no NEED for them to change)

The gifts to kids can be done into a simpler trust with more flexability than a DWT and still leave the nil rate band (x 2) avalible.

Tiggs_2

harryhound wrote: »

Do you really expect the allowance to go up 16% in two years.
Let us pretend that the whole estate is just the (posh) family home worth 600K and that goes up 20% but the allowance stays at 300K ?

It was anounce 2 years ago what it would rise to in 07, 08 and 09 (300, 312 & 325k)

The only "news" is that its £350k in 2010.....as expected.

Tiggs_2

Somerset wrote: »

Can I post a specific question here :

My father died 1987. He was intestate so everything to my mother. Estate amounted to maybe 6K. So when my mother dies is her estate 'tax free allowance' a) 600K b) 300K + father's allowance in 1987 ?

Also after probate, she transferred a small piece of land to me which he had left to her ( value 2K then ) - will that complicate anything ?

Thanks

very simple - how much of his nil band did your dad NOT use - answer = 100%

so when your mum goes she can up HER nil band by 100%. In 07/08 that means £600k, next year £624 then £650 then £700 if she makes it to 2010.

The fact she gave you land is not relevant (as long as it was a gift proper and she retained no use of it)

harryhound

Tiggs wrote: »

when you say "dig into" do you mean "read"...because the answer is yes. Its the executors job on the second death to calculate the allowance, if the executors want to skip the "digging" and risk screwing up big time thats their call.

Believe me, the tax man will even if they don't or more likely he will simply say: YOU prove what happened 25 years ago; I am assuming that on the first death that the Nil Rate Band was used up at that time.

I am the beneficiary of the system before the system before last; we went from Death Duties to Capital Transfer Tax to InHeritance Tax to IHT rules messed about by this Government.
Back in the days of DD, a bloke turned up with a clip board and charged the grieving widow a fist full of tax (politically unacceptable, I can still remember my mother's distress). However there was an allowance that said if the asset had already been charged to DD, it did not get charged again on the second death. Fortunately, when messing about with the IHT rules, the Government forgot this one.
HOWEVER the tax man said "prove it" - thank God I had kept all the correspondence.

Harry.

PaulA

My father died recently and left everything to my mother except for £1000 each for my sister & me and a few small personal items to me. After probate the three of us did a deed of variation to give my sister and me a further amount each within my father’s nil rate band.

As I understand it now we should just rip up the deed of variation and treat the further amount as a gift from my mother which assuming she survives for 7 years as I expect (and hope) will be free of tax. In fact we should probably do another deed of variation to say the original £2000 and personal items went to my mother as well but that is probably more trouble that it’s worth.

Is this correct, and can we just rip up (or at least ignore) the deed of variation we already have?

vortex1150

What if a NRB trust was setup, say for example when the allowance was £275K on fathers death. Surviving mother therefore has a total of £300K plus the £275K.

Under new rule, without this trust, mothers estate would get the £600K.

Is the estate worse off to the tune of £25K?...or will it be possible either;

1. Tear up the trust documents and benefit from £600K

or

2. Add the difference between the £275 NRB trust and the retrospective carried over fathers allowance, (currently £300K) so £25K and add this to mothers £300K.

roddydogs

harryhound wrote: »

Believe me, the tax man will even if they don't or more likely he will simply say: YOU prove what happened 25 years ago; I am assuming that on the first death that the Nil Rate Band was used up at that time.

I am the beneficiary of the system before the system before last; we went from Death Duties to Capital Transfer Tax to InHeritance Tax to IHT rules messed about by this Government.
Back in the days of DD, a bloke turned up with a clip board and charged the grieving widow a fist full of tax (politically unacceptable, I can still remember my mother's distress). However there was an allowance that said if the asset had already been charged to DD, it did not get charged again on the second death. Fortunately, when messing about with the IHT rules, the Government forgot this one.
HOWEVER the tax man said "prove it" - thank God I had kept all the correspondence.

Harry.

What if you cant prove anything?

Tiggs_2

whooooooo!

A trust is a legal document, you cant just go ripping them up!

PaulA

Tiggs wrote: »

whooooooo!

A trust is a legal document, you cant just go ripping them up!

We have not set up a trust, just a deed of variation. Obviously I would not actually rip up anything however as I understand it it is up to us to use the DOV when required rather that it actually becoming part of my father's will. My question really is can we choose not to use it?