Inheritance Tax benefits

Stephen7372

My mother would like to give me some money now hopefully at least 7 years before she dies to avoid inheritance tax. Unfortunately I'm claming Employment and Support Allowance because I have ME/CFS. It's probably I won't ever work. Is there a way she can give me somenthing that I won't have to pay inheritance tax on but sitll claim benefits. 

Jeremy535897

If you are claiming new style ESA it is not means tested (although pensions can affect it). See:
https://www.gov.uk/guidance/new-style-employment-and-support-allowance

Mojisola

Stephen7372 said:

My mother would like to give me some money now hopefully at least 7 years before she dies to avoid inheritance tax. Unfortunately I'm claming Employment and Support Allowance because I have ME/CFS. It's probably I won't ever work. Is there a way she can give me somenthing that I won't have to pay inheritance tax on but sitll claim benefits. 

Inheritance tax is paid by the estate, not by the person who received the money (apart from some very exceptional circumstances).

Will your mother's estate definitely be liable for IHT?

Stephen7372

Mojisola said:

Stephen7372 said:

My mother would like to give me some money now hopefully at least 7 years before she dies to avoid inheritance tax. Unfortunately I'm claming Employment and Support Allowance because I have ME/CFS. It's probably I won't ever work. Is there a way she can give me somenthing that I won't have to pay inheritance tax on but sitll claim benefits. 

Inheritance tax is paid by the estate, not by the person who received the money (apart from some very exceptional circumstances).

Will your mother's estate definitely be liable for IHT?

Yes well I receive less money because intheritance tax will be paid. I'm not sure about IHT seem a bit difficult to work out.

Stephen7372

Jeremy535897 said:

If you are claiming new style ESA it is not means tested (although pensions can affect it). See:
https://www.gov.uk/guidance/new-style-employment-and-support-allowance

I think I'm claiming old style ! I phoned and was told I can have up to £6K without effecting my benefit and it tapers off up to £16K then it goes to down to nothing.

Jeremy535897

You are claiming income related ESA then, and it is means tested. Your mother may be worrying needlessly, as the first £325,000 of her estate, less non-exempt gifts made in the previous seven years, is exempt, plus up to £175,000 residential nil rate band may be available, plus possibly the same again in respect of your father's estate. 

AnotherJoe

How much money and how much do you think your mum would leave (hopefully not for a long time well beyond 7 years)

We see many queries on here about people going through all sorts of shenanigans to avoid IHT when it was never going to be an issue in the first place.

Keep_pedalling

UAnotherJoe said:

How much money and how much do you think your mum would leave (hopefully not for a long time well beyond 7 years)

We see many queries on here about people going through all sorts of shenanigans to avoid IHT when it was never going to be an issue in the first place.

Also what is her marital status and does she own her home?

Stephen7372

My parents owned the house, my Dad died last year and My Mother inherited the house. The house is worth is about £650K and my Mum now has savings of £350K. My Mum is 77 so she may not live a lot longer than 7 years. There is a possiblity she may have to spend a money on care at the end of her life noone knows. 
Can someone recommend a financial advisor we had a free chat with one and she seems a bit pushy and didn't really cover IHT (also mentioned a mortgage management when My Mum doesn't have one.)

Keep_pedalling

Stephen7372 said:

My parents owned the house, my Dad died last year and My Mother inherited the house. The house is worth is about £650K and my Mum now has savings of £350K. My Mum is 77 so she may not live a lot longer than 7 years. There is a possiblity she may have to spend a money on care at the end of her life noone knows. 
Can someone recommend a financial advisor we had a free chat with one and she seems a bit pushy and didn't really cover IHT (also mentioned a mortgage management when My Mum doesn't have one.)

Assuming your father left everything to your mother then IHT is not much of an issue as her estate will only be taxed on amounts over £1M.

The best thing she can do to prevent her estate falling into IHT territory is to start spending some of it on herself. It is pointless building up such wealth only to die with none of it spent. She could also drip feed her annual allowance to you, so you have more disposable income. It should not affect your benefits as long as you don’t simply save it.

Stephen7372

Keep_pedalling said:

Stephen7372 said:

My parents owned the house, my Dad died last year and My Mother inherited the house. The house is worth is about £650K and my Mum now has savings of £350K. My Mum is 77 so she may not live a lot longer than 7 years. There is a possiblity she may have to spend a money on care at the end of her life noone knows. 
Can someone recommend a financial advisor we had a free chat with one and she seems a bit pushy and didn't really cover IHT (also mentioned a mortgage management when My Mum doesn't have one.)

Assuming your father left everything to your mother then IHT is not much of an issue as her estate will only be taxed on amounts over £1M.

The best thing she can do to prevent her estate falling into IHT territory is to start spending some of it on herself. It is pointless building up such wealth only to die with none of it spent. She could also drip feed her annual allowance to you, so you have more disposable income. It should not affect your benefits as long as you don’t simply save it.

Yes my Dad left everything to my Mum. It's just we went to a financial advisor who said we'd have a tax bill of £40K so I'm not sure where she's got that from. We do want somewhere to invest the money at the moment even if my Mum decides she wants to spend more. How do you find a financial adivsor ?