Give £s to sons/IHT/Dep of Assets

castle96

Hi,
some thoughts/advice please
Am 68, in OK health, single, own £150k house outright, funds of approx. £500k, income £13k. House is small, but central to all that is needed. Have new car and all I need. 3 x sons all 40ish, all with families, all looking to move.
I know about IHT and Depr of Assets, etc, but want to give them money now, when needed rather than some time off. Most of my money came to me when Dad recently died. It would have been more 'useful' 20 years ago, bless him. I have no real way of preventing my estate being clobbered by IHT
If I were to give sons say £160k each, … they use for house purchase
then soon I need to go into a care home. My remaining assets/house would be sold off, then Dep of Assts would (rightly) kick in. Given that the funds I gift would now be sitting in the sons bricks and mortar, would the Council force the sale of their properties to reclaim these funds ? How would they know how much to reclaim as they wont know how long I will survive/be in home.
Then, after 2-3 years say, I snuff it. Liable for IHT as within 7 years. How would HMRC recover the liability from sons ?
I'm sure they would 'like' the funds now, but I could be lumbering them with 2 lots of liability !If I kept the money, it could fund a wonderful care home (if needed), but do them no good now. Oh the problems of having a few bob !

Keep_pedalling

Frankly you you would be stupid to give so much. At the moment you have sufficient to insure you have a comfortable old age and help you sons onto the property ladder. Leaving just £20 to cover 20-30 years of emergency funds is not going to cut it.

You don’t need to fund an entire house purchase just provide them with deposit and let then do the rest. If you gave each of them £50k it would take you below the IHT threshold (I assume you are not widowed)

How long ago did your father die? If less than 2 years you can do it via a deed of variation which would mean you do not have to wait 7 years before this falls out of your estate.

castle96

Already did a D of V but only for £10k I am now in hindsight
Would still appreciate some thoughts/answers

the start of IHT is £325 isn't it

Keep_pedalling

castle96 wrote: »

Already did a D of V but only for £10k I am now in hindsight
Would still appreciate some thoughts/answers

the start of IHT is £325 isn't it

You can still do a further DoV.

Apart from your basic nil rate band you have a residence nil rate band of £175k so you can leave up to £500k tax free, although to do that you need to own a home worth at least that amount, so if you stay put we are talking £475k tax free. If you are widowed then you could potentially be able to leave £1M tax free.

In your shoes I would gift a little more, and spend more on yourself by drawing down on your savings. The first thing you should spend some of your considerable saving on is some independent financial advice on the best way to manage your savings, which is something we did when we came into a substantial inheritance.

xylophone

you have a residence nil rate band of £175k

Provided that the property is left to direct descendants.

https://www.gov.uk/government/publications/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band

The OP is only 68 and in good health - DoA is a consideration where gifts have been made with the intention of becoming entitled to/increasing means tested benefits.

https://www.step.org/news/uk-regular-cash-gifts-did-not-prove-deliberate-deprivation-assets

His father has only "recently" died (presumably within two years) so that another DoV should be a possibility.

https://www.gov.uk/alter-a-will-after-a-death

If IFA required

https://adviserbook.co.uk/ - tick "confirmed independent" and such other specialisms as required.

Owain_Moneysaver

castle96 wrote: »

I have no real way of preventing my estate being clobbered by IHT

Anything you leave to charity is exempt from IHT. Won't help your sons, but stops the government (or the Duchy of Cornwall) getting their mitts on the money.

castle96

thanks folks. Me and sister were 50% beneficiaries. She was executor. I need her approval ? (Not a problem) Sons ARE my charity. Further Dof V seems the way forward then....
There is no way of me avoiding IHT though is there (or lessening), other than charities/forests.. blah.

Q was specicically re D of A and IHT - see original Q

Keep_pedalling

castle96 wrote: »

thanks folks. Me and sister were 50% beneficiaries. She was executor. I need her approval ? (Not a problem) Sons ARE my charity. Further Dof V seems the way forward then....
There is no way of me avoiding IHT though is there (or lessening), other than charities/forests.. blah.

Q was specicically re D of A and IHT - see original Q

Yes, you have already been told you can do a further DoV, and you can still keep the majority of your assets and stay within the IHT free zone. You also have the option of spending some of it, what is the point of having money and just leaving it for someone else to spend.

DOA is not really an issue here unless you are dumb enough to give so much away that you end up living hand to moth because your assets are all tied up in your home.

Obviously your are having difficulty grasping the advice given here, on this and previous threads, so you really should take professional advice.

xylophone

you end up living hand to moth

Fly by night?:)

xylophone

Me and sister were 50% beneficiaries. She was executor. I need her approval ? (Not a problem)

No minors involved here so no problem there.

Only adversely affected beneficiaries need to agree.

Thus, suppose Dad 's will says "all my estate to be shared equally between my daughter Mary Jones and my son Ted Smith."

The will can be varied to "25% of my estate to be shared equally between my grandsons John, Mark and Tom Smith, 25% to my son Ted Smith and 50% to my daughter Mary Jones" without Mary's approval because she is not adversely affected.

With regard to IHT see first link in my post above.

castle96

thanks all. Original Q(s) then....
I do a 2nd DofV - Dof A??
How do they enforce against sons - sell up/ Take out loan/remortgage. IHT.....

"Professional advice" for what, as there seems to no way of mitigating IHT. Solicitor needed "professional advice" to do 2nd D of V