Probate Forms – Accounting for Large Cash Gift

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There is a very simple way to pay no IHT on this estate and preserve all that's left of the nil rate band for future use.

depends on the size of the mothers estate if any NRB should be preserved for future use.

Given the intestate stating point of £250k + 1/2 the rest to the wife and 1/2 to kids would need a read of the HMRC manual and relevant commentary on how the RNRB can be treated in such circumstances and what adjustments may be needed to ensure the RNRB is fully uses for this estate.

Yorkshireman99

Linton wrote: »

Do you mean the saving in IHT and possible penalties should far outweigh the fees from taking professional advice?

Compared with the probability of a complete novice getting it wrong yes. The reality is that despite the assertions that it is simply a matter of reading the manuals it is very easy to get it wrong. Given the sums involved the fees are a good insurance. Nobody should rely solely on advice from this forum instead of professional advice given the sums involved.

Tom99

[FONT=Verdana, sans-serif]You don't say what other assets your father had apart from the house in his name.[/FONT]

[FONT=Verdana, sans-serif]I think there is probably a better way of planning for IHT but as YM99 suggests get some proper advice.[/FONT]

[FONT=Verdana, sans-serif]I would be thinking along the following lines depending or your father's other gifts:[/FONT]

[FONT=Verdana, sans-serif]Gift Aug 2013 £50k less 2013/14 £3k allowance and 2012/13 c/f £3k = £44k[/FONT]
[FONT=Verdana, sans-serif]Gift Aug 2016 £150k less 2016/17 £3k allowance and 2015/16 c/f £3k = £144k[/FONT]

[FONT=Verdana, sans-serif]Total gifts in past 7 yrs = £188k. No taper relief available as £188k within NRB.[/FONT]

[FONT=Verdana, sans-serif]So your father has remaining £325k - £188k = £137k NRB plus unused £125k RNRB.[/FONT]

[FONT=Verdana, sans-serif]Since your father's estate at death is over £250k some of it will come to you but this can be altered by a Deed Of Variation.[/FONT]

[FONT=Verdana, sans-serif]I would have a deed of Variation which passes all of your father's estate to your mother, 100%. There will be no IHT to pay.[/FONT]

[FONT=Verdana, sans-serif]Your mother will then have £325k+£137k=£462k NRB plus 2x RNRB. So by 4/2020, if your mother also owns a residence, she will have up to £812k free of IHT.[/FONT]

[FONT=Verdana, sans-serif]Your mother then gifts you the £300k property (maybe in a few months time to ensure the DOV and this gift are not seen as linked transactions)[/FONT]

[FONT=Verdana, sans-serif]That gift will be free from any immediate IHT but will count against your mother's NRB if she dies within 7 yrs of the gift. If £300k is the probate value of the property and it is worth more that £300k when your mother gifts it to you she may have some CGT to pay.[/FONT]

[FONT=Verdana, sans-serif]Providing your mother is sound of mind, you can prepare all of the paperwork for her to sign, with legal help as needed. [/FONT]