How to save IHT on family home and other properties

[Deleted User]

getmore4less said:

If you are going to take a CGT hit anyway might be time to look at a restructuring to offload the property to the kids.

If you died tonight what's the IHT hit given the gifting won't be getting any relief from what you have said.

Probably £400k over the £500k allowed amount as Im leaving my home to my children. I’m going to hope I don’t die just yet lol
At 21 and 24, I don't think they would be able or capable of being landlords yet plus I have early repayments on each mortgage. 

I think we are happy with the 5 year plan to liquidate the two properties at that stage. Cheers 

getmore4less

we all hope we don't die,  does wipe out any CGT.

if the yields are good then they may be worth keeping longer term anyway.

They don't have to manage them you can do the legwork, they just get the capital and income till they are ready

Might have been able to do the new one on a joint basis as they already have homes

As it looks like you are a 40% tax payer unless a significant amount of your £8kpm is tax free then having them get some of the income may reduce the tax liability unless they are already hitting 40%

Then there is the issue of your main home you plan to keep if that is near or already over £500k coming up with a way to mitigate that might be more difficult,

Quite a lot to think about worth a talk with an IHT specialist  and then there is the CGT hit to think about.
 

macman

Starting from a reduced net income of £76K, assuming your expenditure is no more than (wild guess) £30K, then you should be able to accumulate towards a further lump sum at the rate of nearly £4K a month. or nearly £50k in 12 months.

[Deleted User]

getmore4less said:

we all hope we don't die,  does wipe out any CGT.

if the yields are good then they may be worth keeping longer term anyway.

They don't have to manage them you can do the legwork, they just get the capital and income till they are ready

Might have been able to do the new one on a joint basis as they already have homes

As it looks like you are a 40% tax payer unless a significant amount of your £8kpm is tax free then having them get some of the income may reduce the tax liability unless they are already hitting 40%

Then there is the issue of your main home you plan to keep if that is near or already over £500k coming up with a way to mitigate that might be more difficult,

Quite a lot to think about worth a talk with an IHT specialist  and then there is the CGT hit to think about.
 

Its about 92% tax free so far as just started second rental so be 80/20 this tax year. The house value is around £900k so Im going to borrow a bit more as someone said to make mortgage £400k and give that to kids - so main house equity sits at todays IHT limit.  Plus stretch the mortgage till 85 and keep borrowing out as much as I can and giving to kids. 

Thanks for your continued help x

[Deleted User]

macman said:

Starting from a reduced net income of £76K, assuming your expenditure is no more than (wild guess) £30K, then you should be able to accumulate towards a further lump sum at the rate of nearly £4K a month. or nearly £50k in 6 months.

I have an expensive beauty regime !  

But what your saying is, keep money in my name, save up chunks of lump sum, and then transfer it, so its definite PET gifts and easily documented ? 

Jeremy535897

Densol said:

macman said:

Starting from a reduced net income of £76K, assuming your expenditure is no more than (wild guess) £30K, then you should be able to accumulate towards a further lump sum at the rate of nearly £4K a month. or nearly £50k in 6 months.

I have an expensive beauty regime !  

But what your saying is, keep money in my name, save up chunks of lump sum, and then transfer it, so its definite PET gifts and easily documented ? 

I would suggest the reverse. See https://www.canadalife.co.uk/technical-support/gifting-as-part-of-normal-expenditure-out-of-income/

macman

Densol said:

macman said:

Starting from a reduced net income of £76K, assuming your expenditure is no more than (wild guess) £30K, then you should be able to accumulate towards a further lump sum at the rate of nearly £4K a month. or nearly £50k in 6 months.

I have an expensive beauty regime !  

But what your saying is, keep money in my name, save up chunks of lump sum, and then transfer it, so its definite PET gifts and easily documented ? 

I'm not suggesting anything. I'm just trying to understand why, with your level of regular income, you are apparently unable to accumulate large cash sums within a relatively short period of time.

[Deleted User]

macman said:

Densol said:

macman said:

Starting from a reduced net income of £76K, assuming your expenditure is no more than (wild guess) £30K, then you should be able to accumulate towards a further lump sum at the rate of nearly £4K a month. or nearly £50k in 6 months.

I have an expensive beauty regime !  

But what your saying is, keep money in my name, save up chunks of lump sum, and then transfer it, so its definite PET gifts and easily documented ? 

I'm not suggesting anything. I'm just trying to understand why, with your level of regular income, you are apparently unable to accumulate large cash sums within a relatively short period of time.

I just spent my last £120k in September on most recent BTL 

[Deleted User]

Jeremy535897 said:

Densol said:

macman said:

Starting from a reduced net income of £76K, assuming your expenditure is no more than (wild guess) £30K, then you should be able to accumulate towards a further lump sum at the rate of nearly £4K a month. or nearly £50k in 6 months.

I have an expensive beauty regime !  

But what your saying is, keep money in my name, save up chunks of lump sum, and then transfer it, so its definite PET gifts and easily documented ? 

I would suggest the reverse. See https://www.canadalife.co.uk/technical-support/gifting-as-part-of-normal-expenditure-out-of-income/

That is extremely helpful - thank you 
I’ve read that and saved it down 
cheers 

Keep_pedalling

Densol said:

macman said:

Densol said:

macman said:

Starting from a reduced net income of £76K, assuming your expenditure is no more than (wild guess) £30K, then you should be able to accumulate towards a further lump sum at the rate of nearly £4K a month. or nearly £50k in 6 months.

I have an expensive beauty regime !  

But what your saying is, keep money in my name, save up chunks of lump sum, and then transfer it, so its definite PET gifts and easily documented ? 

I'm not suggesting anything. I'm just trying to understand why, with your level of regular income, you are apparently unable to accumulate large cash sums within a relatively short period of time.

I just spent my last £120k in September on most recent BTL 

Maybe you should diversify a bit, you seem to sticking everything into property which makes IHT planing a lot more difficult than it is with liquid assets. You already have way more income than you need so why buy another property to get yet more income when you could have gifted that money as part of you tax planning? How much are you putting into your pension?