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Inheritance tax - should we buy a bigger / more expensive house?

Marine_life
Posts: 1,059 Forumite

in Cutting tax
Two questions:
1. Our current home is worth around 500,000 - if I understand the rules correctly, for IHT purposes we would be better off owning a home that is worth somewhere north of that - correct?
2. I understand the higher main residence allowance tapers if assets are greater than 2 million. Does that mean just property assets or total assets?
1. Our current home is worth around 500,000 - if I understand the rules correctly, for IHT purposes we would be better off owning a home that is worth somewhere north of that - correct?
2. I understand the higher main residence allowance tapers if assets are greater than 2 million. Does that mean just property assets or total assets?
Money won't buy you happiness....but I have never been in a situation where more money made things worse!
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Comments
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1. First I've heard of it; please explain.
2. The lot.Free the dunston one next time too.0 -
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Your home is currently worth far more than you combined primary residence nil rate bands, so buying a more expensive me is not going to help as far as inheritance planning is concerned. Assuming you have children you would be far better off thinking about gifting to them to make use of the 7 year rule, especially if your estate is well over a £1M.0
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So probably the impact is that you have a total of 350k to offset against a house and 650 to offset against the house OR other assets (those values are for a couple). So actually ....no incentive to own a larger house.Money won't buy you happiness....but I have never been in a situation where more money made things worse!0 -
Purchasing a larger home has no bearing whatsoever in inheritance taxes. This tax is determined by the overall wealth if the first to die of a married couple passed their estate to the spouse. It is simple a matter of total assets unless you take action to mitigate the tax at sufficient a time before you die.
SamI'm a retired IFA who specialised for many years in Inheritance Tax, Wills and Trusts. I cannot offer advice now, but my comments here and on Legal Beagles as Sam101 are just meant to be helpful. Do ask questions from the Members who are here to help.0
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