Inheritance tax - £2m estate

Jeremy535897

Matty1111 said:

Keep_pedalling said:

Having a £1.2M estate with all of it tied up in your home is not a great position to be in especially if they are going to give up the income they are receiving from the commercial property.

The commercial property is a fairly recent addition. They inherited it a few years ago. I don’t believe they’ve ever spent the income on themselves. Last year my sister got new double glazing and this year my brother a new bathroom.

Point taken though, we’ll need to double check their pensions are adequate going forward.

The gifts of kitchen, double glazing etc will also have to be taken into account if they die within seven years, to the extent not covered by annual or other exemptions.

comeandgo

Grumpy_chap said:

Mojisola said:

They may feel that spending just to get rid of money is a pretty pointless business.

Similarly, with the fortnight in Spain that the OP's parents enjoy, £3k is not an outlandish cost - the OP's parents could seemingly choose a more luxurious version of the same trip.  They may not enjoy it, but of they never try it, how will they know?

We tried the more luxurious holiday options with my parents but it was no good, dad said they were so out of their comfort zone it was not a holiday they ever wanted to repeat.

Matty1111

Grumpy_chap said:

Maybe your parents needs to be introduced to the more luxurious life - they have clearly got enough to enjoy more than a fortnight in Spain. 
Perhaps they'd like a first-class and five-star trip to the Caribbean? 
Perhaps they'd like a luxury stay away somewhere really nice in the UK?  Could easily spend over £1k on a weekend break.

Believe me I’ve tried 😂 

They have at least started flying premium economy.

I like the idea of us spending the gifted money on improving the quality of the travel they do since they will not spend it on themselves. Fairly easy to conceal too.

Albermarle

comeandgo said:

Grumpy_chap said:

Mojisola said:

They may feel that spending just to get rid of money is a pretty pointless business.

Similarly, with the fortnight in Spain that the OP's parents enjoy, £3k is not an outlandish cost - the OP's parents could seemingly choose a more luxurious version of the same trip.  They may not enjoy it, but of they never try it, how will they know?

We tried the more luxurious holiday options with my parents but it was no good, dad said they were so out of their comfort zone it was not a holiday they ever wanted to repeat.

I have slowly got 'better' at spending as I have become older/better off and with some encouragement from my OH, who is  naturally 'better' at spending .

We have been to Spain for summer holidays, on and off for many years. First time was a one star, then a two star and this year was a ( proper) four star. Around £2,500 for a week for 3 adults( 2 rooms) , although got it a bit cheaper as we booked in January and I think normally would have been > £3K It was very nice and probably has spoiled us for the future. I do not think I would pay more than that though, probably hit my limit.

Payig 40/50 quid per head for a meal, must be joking, lol.

On the above holiday, we did pay over £100 one night for a meal and drinks for three, but we never went back to that restaurant 

Keep_pedalling

Albermarle said:

comeandgo said:

Grumpy_chap said:

Mojisola said:

They may feel that spending just to get rid of money is a pretty pointless business.

Similarly, with the fortnight in Spain that the OP's parents enjoy, £3k is not an outlandish cost - the OP's parents could seemingly choose a more luxurious version of the same trip.  They may not enjoy it, but of they never try it, how will they know?

We tried the more luxurious holiday options with my parents but it was no good, dad said they were so out of their comfort zone it was not a holiday they ever wanted to repeat.

Payig 40/50 quid per head for a meal, must be joking, lol.

On the above holiday, we did pay over £100 one night for a meal and drinks for three, but we never went back to that restaurant 

One of the joys about being comfortable off is that you can judge a restaurant on the quality of the food rather than the price. I have a particular fondness for seafood and the good stuff does not come cheap. I do like to think of it that 40% of the price of a lobster, or a nice piece of halibut is being paid by HMRC as each plate full reduces the potential IHT bill.  

Albermarle

Keep_pedalling said:

Albermarle said:

comeandgo said:

Grumpy_chap said:

Mojisola said:

They may feel that spending just to get rid of money is a pretty pointless business.

Similarly, with the fortnight in Spain that the OP's parents enjoy, £3k is not an outlandish cost - the OP's parents could seemingly choose a more luxurious version of the same trip.  They may not enjoy it, but of they never try it, how will they know?

We tried the more luxurious holiday options with my parents but it was no good, dad said they were so out of their comfort zone it was not a holiday they ever wanted to repeat.

Payig 40/50 quid per head for a meal, must be joking, lol.

On the above holiday, we did pay over £100 one night for a meal and drinks for three, but we never went back to that restaurant 

One of the joys about being comfortable off is that you can judge a restaurant on the quality of the food rather than the price. I have a particular fondness for seafood and the good stuff does not come cheap. I do like to think of it that 40% of the price of a lobster, or a nice piece of halibut is being paid by HMRC as each plate full reduces the potential IHT bill.  

Next time I am sweating about paying a big bill, I will also now try and think about the 40% IHT 'discount' 

Flugelhorn

I started travelling first class on trains (trouble is that the kids do too even after their student railcards ran out) - fanciest cabins on ferries etc but that is as far as it goes - I bought car and let one of the kids use it, I tax it, service it and MOT it, even then it is only a tiddly car, should have got him something more fancy 

I like the idea of thinking about the 40% IHT discount 

Robert_McGeddon

Keep_pedalling said:

 I do like to think of it that 40% of the price of a lobster, or a nice piece of halibut is being paid by HMRC as each plate full reduces the potential IHT bill.  

Brilliant!

Time4T_Accounts

We had lobster In Cornwall a couple of weeks ago: they were absolutely delicious, and the memory is even better now that I can consider the discount!!

kidmugsy

They're not rich enough to risk giving away lots of capital.  What if one needs care while the other still needs the house to live in?

They could sell the commercial property and buy woodland or agricultural land that would be free of IHT.  

https://www.gov.uk/guidance/agricultural-relief-on-inheritance-tax
https://www.farrer.co.uk/news-and-insights/woodland-tax/

I suppose they could invest in AIM shares that attract Business Property Relief.

I'd say they need expert advice.