A rare Inheritance Tax Situation

Taken2much2

A rare Inheritance Tax Situation

I would like to put forward a thought and ask if anyone has knowledge on the subject.

My daughter was a wealthy young lady.

She died young.

My family inherited her wealth, and we paid a vast sum in inheritance tax.

We had to sell her home to pay all that was due.

I am left with a London flat that is let. We paid 40% in inheritance tax on it.

I am an old man; I need the rental as I do not have a private pension.

If I were to die soon, there would be another 40% to pay.

Should there or is there a rule that stops a property from being taxed AGAIN for some years?

I think 25 years or more is reasonable.

 

Flugelhorn

depends on the size of your estate as to whether IHT is due

yes estates can be taxed twice in short order - certainly did for some large country estates where the head of the family changed in quick succession

Keep_pedalling

What is your marital status? What is the current net worth? Do you have other children. Without knowing those things we can’t say whether your estate would be subject to IHT or not.

When did your daughter die? If it was less than 2 years ago then you can pass on some of your inheritance via a deed of variation which will take that amount out of your estate.

Keep_pedalling

There is actually something called quick succession relief but it only applies to deaths occurring within 5 years of each other.

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm22041

Taken2much2

Thank you both for the wise comments. I have done a good amount of research and my estate will be subject to IHT. Clearly the situation is how it is. I hope to make more people aware of this as I feel it to be excessively cruel. I will try and get my MP interested. A number of years between implementing IHT seems perfectly reasonable and I will do my best to achieve this. Thanks again.

Taken2much2

Keep _Pedalling.Thanks for this. My situation is past the five years but this is still usefull. Thank you

Cook_County

Options include:
1. You marrying an 18 year old - delaying inheritance tax until your new spouse dies many decades in the future
2. Borrowing against the property, spending the money & leaving an estate below the IHT threshold 

uknick

It's not a rare situation you are talking about.  There may be some years between the IHT charge, but unless you spend it all there is a good chance the assets in an estate may have IHT levied against them more than once.  I'd think property in the south east will be subject to multiple IHT charges throughout its life.

lincroft1710

Taken2much2 said:

Thank you both for the wise comments. I have done a good amount of research and my estate will be subject to IHT. Clearly the situation is how it is. I hope to make more people aware of this as I feel it to be excessively cruel. I will try and get my MP interested. A number of years between implementing IHT seems perfectly reasonable and I will do my best to achieve this. Thanks again.

I cannot see that IHT being paid twice on a property is "excessively cruel". It will not actually affect you.

silvercar

I think it is reasonable to think of your child pre-deceasing you as cruel. Having to consider your own estate facing a tax bill when you have already paid tax on money you inherited from your child is harsh. The RNRB applies to descendants not parents.

Sorry for your loss OP.

Taken2much2

There are many circumstances where IHT can be seen as distasteful. There are others where IHT is abhorrent. When a young wealthy person dies, the parents are hurt with grief, and loss of financial security as a family. Brothers and sisters too. The brothers and sisters live longer with the loss and get to see a wealthy estate reduced to not so much. I think it is time for some exceptions to the rule. I am sure there are worse situations than mine out there. Thank you for all the comments.