Inheritance tax advice

Hi 

I wanted to get some advice on inheritance tax please. 

My employer has offered to pay to see a financial advisor (I’m meeting at end of the month) and I’ve done some research on my own circumstances. But still quite confused!

I want to leave below to my partner/son without having to pay too much inheritance tax. 

Always found the advice on here really useful and very grateful for any thoughts before I meet financial adviser.

I’m 55 in full time employment

I live with my partner but we’re not married or in civil partnership

My son is 20 currently at uni

I have 2 properties - home (worth about £300,000) and house I rent (worth about £150,000)

Both properties are owned outright, no mortgage

I have savings about £200,000 in various S&S Isas, pension AVCs, easy access accounts

I have Local Government Pension, which I’m planning to leave alone while still in f/t job

I have a will with my partner/son inheriting above

Would really appreciate any advice/thoughts.

Many thanks 


Comments

  • poppystar
    poppystar Posts: 1,261
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    Getting married/ civil partnership would solve this. I’m pretty sure that’s the same first advice you will get from a financial advisor. The system is strongly skewed against unmarried people.
  • Keep_pedalling
    Keep_pedalling Posts: 16,226
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    edited 7 January at 5:54PM
    If you got married or formed a civil partnership you can avoid IHT entirely so why not do it?
  • RAS
    RAS Posts: 32,468
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    In the short-term, make sure your LGPS nomination form is complete and allocates death in service payments as you wish.

    And check whether your partner can be nominated to receive a survivor's pension. If not either marriage or civil partnership would make a huge difference,
    The person who has not made a mistake, has made nothing
  • bobster2
    bobster2 Posts: 444
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    edited 7 January at 7:48PM
    Yes - it can get complex if you're not married.
    Even unmarried - you potentially have a tax free allowance of £500,000 - i.e. nil rate band (£325,000) and residential nil rate band (£175,000).
    However, if you remain unmarried - you should get specialist advice on how to word your will to ensure that you can use the full RNRB - as your partner is not a direct descendant. It can get complicated - as "Where the home forms part of the residue and the residue has passed on to a number of different people, HMRC treat each of them as inheriting a proportion of the home" (https://www.gov.uk/guidance/inheritance-tax-residence-nil-rate-band#inh-home). Currently 50% of the value of your primary residence (£150,000) is less than the value of the full RNRB.
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