How are you mitigating for IHT

MarzipanCrumble

Not sure where to put this - but Pension Forum is seen as being 'wealthy'.  

If I die today my executors will need to pay IHT.  

Some facts about me:

1.  Early 70's
2.  Widow
3.  Income DB (mine and my deceased husband) and SP  (deferred pre 2016 for several years) so at least 22K pa with dead husband uplift to SP as he born early 1940s.
4.  House main asset £700+
5.  SIPP +-250K - untouched
5a Other S&S Investments doing well

6.  2 Life Insurance i.e pay out on death not part of estate, in Trust to children - may cover some - premiums increase each year.
7.  Have a Financial Advisor
8.  Have gifted into Trust an Income Bond  (10 years)

So what would you do to mitigate IHT?

SVaz

Unless your investments are very large, there will be minimal IHT.
You have £1million in allowances. 

eskbanker

MarzipanCrumble said:

7.  Have a Financial Advisor

[...]

So what would you do to mitigate IHT?

Ask the advisor?

SVaz

Start drawing tax free cash from your Sipp in 2027 and spend it ?   

Aretnap

Spending money on nice things is a good way to mitigate inheritance tax, I find.

MarzipanCrumble

I am nearing 2 million.  My house i worth alone 850k.  If I upgrade it (carbon reducing, additional buildage) it willbe woth over 1 million even though I would have spent prob 300K to do this.  I have no quotes but a lot of houses in my environs are upgrading...

Marcon

MarzipanCrumble said:

I am nearing 2 million.  My house i worth alone 850k.  If I upgrade it (carbon reducing, additional buildage) it willbe woth over 1 million even though I would have spent prob 300K to do this.  I have no quotes but a lot of houses in my environs are upgrading...

So why do you think a couple of lines on a free forum, with replies from a random bunch of strangers, based on virtually zero rather vague information, is going to be more helpful than using an adviser who is fully familiar with all relevant circumstances, finances etc...?

Some economies are hopelessly misguided!

MarzipanCrumble

Aretnap said:

Spending money on nice things is a good way to mitigate inheritance tax, I find.

Yeah, my brain says yes, my whole says no.  I find it really, really hard - goes back to childhood and guess what y parents did?  Give you 3 guesses!!!  Do you want to take up the challange?

Marcon

MarzipanCrumble said:

Aretnap said:

Spending money on nice things is a good way to mitigate inheritance tax, I find.

Yeah, my brain says yes, my whole says no.  I find it really, really hard - goes back to childhood and guess what y parents did?  Give you 3 guesses!!!  Do you want to take up the challange?

Not really. I'd prefer you to get qualify professional advice, for your own wellbeing and peace of mind. And you are far from alone in finding it hard to actually spend money after a lifetime of saving...

kempiejon

It depends on who benefits from the estate I guess. I have heard some say they like indulging family and friends while arround to enjoy it with them and stop thinking about the post death uses of ones wealth. I like to kid myself that  all spending once the estate is above IHT level as getting a 40% discount on shopping. Philanthropy is my favourite way of dealing with the problem - and whilst alive not a bequest. 
However this estate doesnt look likes there's massive IHT liability with current allowance and some assumptions I have made. There could be spare millions in unmentioned ISAs and the other S&S doing well.

MarzipanCrumble

Marcon said:

MarzipanCrumble said:

I am nearing 2 million.  My house i worth alone 850k.  If I upgrade it (carbon reducing, additional buildage) it willbe woth over 1 million even though I would have spent prob 300K to do this.  I have no quotes but a lot of houses in my environs are upgrading...

So why do you think a couple of lines on a free forum, with replies from a random bunch of strangers, based on virtually zero rather vague information, is going to be more helpful than using an adviser who is fully familiar with all relevant circumstances, finances etc...?

Some economies are hopelessly misguided!

Because this communial brain has come up with good answers to previous questions.

I know that the problem is not holding on to wealth - so what does the communal brain advise?  Should I upgrade my house then up regular payments to children?  Upgrading will deplete my immediate assets but make my house worth more.  Say 300k worth more as a house up the street was worth after ugrading but NOT with a view over a lake that mine has.

I could move to a flat - service charge with no control plus council tax - not happy to do that and would leave with me with equity which woud still be subject to IHT.

I have gifted already.  I prob need to gift a lump sum again.  I have a SIPPworth 300k which I have not touched and the Gov has now included in IHT. Not complaining TBH as I always thought it was a bit iffy.  But it impacts my children and I want to protect them as far as poss.

Sorry, I am a baby boomer as was my husband who dug himself out of a mining community because the mining community supported those who could.
My husband was moderately successful and I landed in public service jobs with DB pensions  -  my husband's was a combo of DB and SIPP - the SIPP bought an annuity which was inflation linked and provided me with 50% inceasing.

Iknow I am priveledged - just wondering what questions I should ask re IHT