Inheritance tax avoidance help - who to consult

littlebranshill

I own 2 properties. My husband died 9 years ago and we have no children. Both properties are in my sole name. When I die I am going to be stung for Inheritance Tax. I need help in sorting out what I can do with the properties now to avoid my estate being hammered with 40% tax. Who do I consult? A solicitor doesn't seem to have the information I need and an accountant wouldn't have the necessary legal knowledge. Apart from the 2 houses I don't have any savings so is it just a question of putting the houses in joint names although I have read in another forum that if they are not related to you then the whole of the house comes into the final evaluation. Help please!

getmore4less

How much are they worth?

You probably have £650k to play with before IHT.

gifting assets away has to be done properly to avoid gifts with reservations.

littlebranshill

I should say its about 950k

xylophone

When I die I am going to be stung for Inheritance Tax.

I don't suppose you'll feel it.:)



https://www.moneyadviceservice.org.uk/en/articles/a-guide-to-inheritance-tax

https://www.moneysavingexpert.com/family/inheritance-tax-planning-iht

However, for those with bigger estates, an independent financial adviser may, depending on their qualification, be able to help (see the Financial Advice guide), but a solicitor or tax accountant is a better bet for more specialised info. Preferably find one who is a member of the Society of Trust and Estate Practitioners, take a look on the STEP and Chartered Institute Of Taxation websites.

00ec25

as above, the IHT experts are STEP members

Tom99

[FONT=Verdana, sans-serif]Are both houses your residence? If not transferring the one you don't occupy to the children now would be one solution but might involve some CGT now.[/FONT]

anselld

Tom99 wrote: »

[FONT=Verdana, sans-serif]Are both houses your residence? If not transferring the one you don't occupy to the children now would be one solution but might involve some CGT now.[/FONT]

Depends who the intended beneficiaries are. The OP stated there are no children.

le_loup

So, if it's mans inalienable duty to give all his wealth upon death to his children without let or hindrance from a money grabbing government, how come some people are equally desperate to hold on to this money themselves upon death? A strange expression: "I am going to be stung for inheritance tax".

When one has no children, or even when you do, there can be no fairer way of taxation than for your money it to do good for your country when you have no further need of it. Or perhaps the way of the Pharaohs should be the way forward.

lincroft1710

Why do people worry so much about inheritance tax? They certainly won't pay it! Their beneficiaries if non spousal will have have a windfall anyway.

kidmugsy

OP, there are options as follows; an expert will presumably know more.

(i) Live with the prospect: when you die, if the laws are unchanged, and if property has retained its value, there will be IHT for your estate to pay. Note the "if"s.

(ii) As (i) but take out insurance that will be a tax-effective way to pay the IHT bill.

(iii) Gift away some of your wealth and survive another seven years. (If you like, take out tax-efficient insurance to cover the consequences of dying earlier).

(iv) Put more of your wealth into assets that qualify for Agricultural Property Relief or Business Property relief, and be careful to survive for two years. (If you like, take out tax-efficient insurance to cover the consequences of dying earlier).

(v) Perhaps small scale, but you can gift away £3k p.a. exempt from IHT (£6k in the first year if you didn't use up any allowance in the year before), plus £250 p.a. to as many people as you like who didn't gain from the £3k. You can also make IHT-exempt gifts of any surplus income you have - you need to keep records so that your executor can show that your surplus income was large enough to justify the gifts.

(vi) Gift money to charity. Your specialist lawyer will recommend a best way of doing this.

(vii) Spend more money on yourself.

(viii) Spend money on Doing Good: e.g. hire a hitman to kill, injure, or embarrass a few public enemies.

Keep_pedalling

If you have children and live a couple more years you can leave them £1M without any IHT using 2 lots of nil rate band and 2 lots of primary residence nil rate band. If, as you opening post suggests, you have no children, you can still leave £650k tax free, so what on earth are you worrying about?

As you are cash poor I would suggest you sell the second home and live it up a little before the inevitable happens. You will probably have some CGT to pay but that is the problem when you tie up all your wealth in property.