Best way to cut inheritance tax without gifting?

Mojisola

If she wants her estate to pay less tax, she needs to give money away now (and live for seven years). 
Everything else will incur costs. 
If she wants you to benefit, why is she clinging on to all her assets?

tommydog40

Mojisola said:

If she wants her estate to pay less tax, she needs to give money away now (and live for seven years). 
Everything else will incur costs. 
If she wants you to benefit, why is she clinging on to all her assets?

There is no chance she would give any money / assets  away in her lifetime.  This idea needs to be completely discounted.  She would be willing to move assets around (into a trust etc), or explore other options which do not involve her giving money away in her lifetime. 

I understand the most tax efficient solution is to gift assets during ones lifetime, but if that is not an option, one most explore other mechanisms.  

Mojisola

tommydog40 said:

 I understand the most tax efficient solution is to gift assets during ones lifetime, but if that is not an option, one most explore other mechanisms. 

Then she should be willing to pay for professional advice and not expect you to stump up the money.

Murdina

Moving assets into a trust is another way of giving them away. I feel reading your comments that she does not really want to play ball with all this.

Bear in mind too that setting up a trust will require a lot of professional fees (there will be annual tax returns for example and 10 year IHT returns potentially) and someone is going to have to pay those.These are over and above the fees for the advice that tells you whether or not you will save IHT by setting up a trust.

tommydog40

Mojisola said:

tommydog40 said:

 I understand the most tax efficient solution is to gift assets during ones lifetime, but if that is not an option, one most explore other mechanisms. 

Then she should be willing to pay for professional advice and not expect you to stump up the money.

It does not matter what she should or should not do.  I have to deal with the situation as it is.  I will pay for some professional advice when I have the funds, but it will take me a while.  In the meantime, I was just trying to explore some possible options.

tommydog40

Murdina said:

setting up a trust will require a lot of professional fees (there will be annual tax returns for example and 10 year IHT returns potentially) and someone is going to have to pay those.These are over and above the fees for the advice that tells you whether or not you will save IHT by setting up a trust.

Based on the figures I quoted for her estate, does anyone have a rough estimate as to how much IHT a trust may save?  If it was going to be worthwhile, I would be willing to pay professional fees for the trust.  I would just need to budget for it and save up.  If it would provide a clear financial benefit to myself in the long run, it would be a no brainer.

Sea_Shell

Do you hold power of Attorney for your Mum currently?

tommydog40

Sea_Shell said:

Do you hold power of Attorney for your Mum currently?

Yes but only in the event that she loses mental capacity.

Sea_Shell

So has she asked you to "sort this problem out" for her?

tommydog40

Sea_Shell said:

So has she asked you to "sort this problem out" for her?

She is willing to explore options as long as it does not involve her gifting any assets in her lifetime and has made it clear that I will be responsible for paying for any professional advice.