Probate & IHT - I can do this!

Bapster76

RAS said:

Good, you will need to set up trusts for your children, as minors can't inherit personally. Feeding a JISA might be appropriate.

My guess is that the solicitors would welcome the fees associated by running the trusts. Every time you sneeze, it'll cost money.

What would I need to do to setup trusts?  As you mentioned, they already have a JISA,  and had planned to put their money in there.   Am I over simplifying it? 

The solicitors want another £360 for a deed of retirement and appointment.  Where I would appoint my wife as the second trustee and they retire.

Keep_pedalling

Bapster76 said:

RAS said:

Good, you will need to set up trusts for your children, as minors can't inherit personally. Feeding a JISA might be appropriate.

My guess is that the solicitors would welcome the fees associated by running the trusts. Every time you sneeze, it'll cost money.

What would I need to do to setup trusts?  As you mentioned, they already have a JISA,  and had planned to put their money in there.   Am I over simplifying it? 

The solicitors want another £360 for a deed of retirement and appointment.  Where I would appoint my wife as the second trustee and they retire.

Depends on how much we are talking about, JISAs are useful for smaller amounts but not larger ones because of the limits to how much you can put in each financial year.

If we are talking about larger amounts of money it can be tricky and the best option will depend on the age of the children. For teenagers it would need to be held in cash, for babies investing in equities is going to be the better choice. 

Bapster76

Keep_pedalling said:

Bapster76 said:

RAS said:

Good, you will need to set up trusts for your children, as minors can't inherit personally. Feeding a JISA might be appropriate.

My guess is that the solicitors would welcome the fees associated by running the trusts. Every time you sneeze, it'll cost money.

What would I need to do to setup trusts?  As you mentioned, they already have a JISA,  and had planned to put their money in there.   Am I over simplifying it? 

The solicitors want another £360 for a deed of retirement and appointment.  Where I would appoint my wife as the second trustee and they retire.

Depends on how much we are talking about, JISAs are useful for smaller amounts but not larger ones because of the limits to how much you can put in each financial year.

If we are talking about larger amounts of money it can be tricky and the best option will depend on the age of the children. For teenagers it would need to be held in cash, for babies investing in equities is going to be the better choice. 

Thanks,  I'm happy to manage either the cash or JISA for them,   do I need to legally setup anything to create the trust or can simply handle the money for them?  Sorry if this is a daft question 😬 

Keep_pedalling

Bapster76 said:

Keep_pedalling said:

Bapster76 said:

RAS said:

Good, you will need to set up trusts for your children, as minors can't inherit personally. Feeding a JISA might be appropriate.

My guess is that the solicitors would welcome the fees associated by running the trusts. Every time you sneeze, it'll cost money.

What would I need to do to setup trusts?  As you mentioned, they already have a JISA,  and had planned to put their money in there.   Am I over simplifying it? 

The solicitors want another £360 for a deed of retirement and appointment.  Where I would appoint my wife as the second trustee and they retire.

Depends on how much we are talking about, JISAs are useful for smaller amounts but not larger ones because of the limits to how much you can put in each financial year.

If we are talking about larger amounts of money it can be tricky and the best option will depend on the age of the children. For teenagers it would need to be held in cash, for babies investing in equities is going to be the better choice. 

Thanks,  I'm happy to manage either the cash or JISA for them,   do I need to legally setup anything to create the trust or can simply handle the money for them?  Sorry if this is a daft question 😬 

If it is not in a JISA in must be held a trust account otherwise you will be taxed on any income and it would be problematical if anything happened to you. NS&I do then as do some building societies. 

Bapster76

Keep_pedalling said:

Bapster76 said:

Keep_pedalling said:

Bapster76 said:

RAS said:

Good, you will need to set up trusts for your children, as minors can't inherit personally. Feeding a JISA might be appropriate.

My guess is that the solicitors would welcome the fees associated by running the trusts. Every time you sneeze, it'll cost money.

What would I need to do to setup trusts?  As you mentioned, they already have a JISA,  and had planned to put their money in there.   Am I over simplifying it? 

The solicitors want another £360 for a deed of retirement and appointment.  Where I would appoint my wife as the second trustee and they retire.

Depends on how much we are talking about, JISAs are useful for smaller amounts but not larger ones because of the limits to how much you can put in each financial year.

If we are talking about larger amounts of money it can be tricky and the best option will depend on the age of the children. For teenagers it would need to be held in cash, for babies investing in equities is going to be the better choice. 

Thanks,  I'm happy to manage either the cash or JISA for them,   do I need to legally setup anything to create the trust or can simply handle the money for them?  Sorry if this is a daft question 😬 

If it is not in a JISA in must be held a trust account otherwise you will be taxed on any income and it would be problematical if anything happened to you. NS&I do then as do some building societies. 

Got it, makes sense thanks.

Bapster76

I've decided to go ahead with the Deed of Renunciation and have instructed the solicitor to prepare it, should be ready next week.

I received the IHT Reference Number yesterday so going to spend some time this weekend on the schedules, the forms I've identified I need are:

IHT 400

IHT435  Residence Nil Rate Band

IHT405  Property details

IHT406  Bank Accounts

IHT407  Personal Goods

IHT409  Pensions, mum had a single teachers pension

What's the recommendation on a RICS valuation for the property?  

RAS

If you report the house @£600k you may well end up with a £52k IHT bill. Although the executors costs may reduce it a bit?

If it sells for more, you'll be paying CGT @ 18-24%. 

I'd be inclined to look at recently sold houses in the same neighbourhood, and adjust for likely issues like major replacements (heating, roof, electric circuits). 
. 

Bapster76

This is the tricky bit,  it's on a private road of about 10 houses,  all different,  that don't come up for sale very often.  Last one was 2015. 

Quick question on CGT,  if it does sell for more.  Do each of the beneficiaries get a £3k cgt allowance even minors?  

RAS

No, the estate gets a single CGT allowance.

Do not get tempted to transfer the estate into the beneficiaries' names. The children will lose any first time buyer benefits if they have ever owned a property previously. Which could cost a lot more than some CGT. 

Savvy_Sue

Bapster76 said:

This is the tricky bit,  it's on a private road of about 10 houses,  all different,  that don't come up for sale very often.  Last one was 2015. 

Quick question on CGT,  if it does sell for more.  Do each of the beneficiaries get a £3k cgt allowance even minors?  

That would be an argument for getting a 'proper' RICS valuation if you think there may be IHT to pay, or 2-3 estate agents valuations if you're sure you're coming in well under the limit - HMRC are less likely to argue with a 'proper' valuation. 

The advantage of getting a few estate agents in is that you can get a feel as to whether you'd want to work with them to actually sell the house (assuming that's what you're doing). If you need to buy others out because you want to keep it then RICS should avoid arguments.