Should my mum pay £6k for IHT (non) advice?

Emmia

Keep_pedalling said:

I just watched that TikTok presentation. A trust with a clause that comes into effect 2 days before you die! Where do I sign and can I have some magic beans with that please👿

If they've got a crystal ball that's that accurate, where can I get one of those? Would be handy for all sorts of things.

poseidon1

VT82 said:

probate_slave said:

This company, in particular its magical proposal to put property into trust without ever incurring IHT or CGT charges nor losing private residence relief, is currently being scrutinised on the Trusts Discussion Forum. The solicitors are not impressed.

https://trustsdiscussionforum.co.uk/t/lifetime-trusts-of-residential-property-having-your-cake-and-eating-it/27517

Wow that thread is quite damning. I'll make sure she doesn't hand over any money to them.

poseidon1 said:

Your mother's estate planning may or may not  warrant creation of a life time trust, but in my view a  STEP qualified Accountant coupled with a similarly qualified Solicitor ( to handle Wills and any lifetime trust provision), are more likely to be able to put together bespoke and robust tax mitigation strategies for her particular asset base, than an IFA limited to offering package schemes. 

Thank you that is really helpful. She has an accountant but they don't seem to be the best. I remember being told to look at 'unbiased' many years ago when someone suggested an IFA - do you know a good place to look for what you propose? Would it be the same but searching for a STEP qualified chartered accountant rather than an IFA?

To find a Chartered Accountant with trust/ IHT planning expertise suggest you use the Institute of Chartered Accountants England and Wales searching engine below


https://www.icaew.com/about-icaew/find-a-chartered-accountant

Type in Trusts as the specialism and the nearest big city to your locale. Once you are  in a firm's website you will be looking for TEP qualified practioners in their IHT estate planning division.

 I am more familiar with London where there is understandably a very significant number of firms with the relevant competencies in this sector. 

Incidentally  I see  from the thread below you raised this matter  in 2023, and was provided with a link to the STEP directory to explore possible candidates for advice from that source - did nothing come of that?  -

https://forums.moneysavingexpert.com/discussion/6449015/estate-planning-and-iht-can-the-family-house-be-kept-somehow#latest

With your mother ( and father) now 2 years older, the window for planning involving seven years survival is steadily diminishing.

VT82

Nothing came from the 2023 family discussions into the matter. Circumstances on who planned to live where etc were a moving feast. But it is currently top of my mum's priorities/worries again hence the repeat post with the specific concerns about Strategic Asset Protection.

I looked on that search engine and suggested some to her. She has this afternoon made an appointment with one in her town. And will be ghosting SAP if they follow up on their quote!

Albermarle

VT82 said:

Nothing came from the 2023 family discussions into the matter. Circumstances on who planned to live where etc were a moving feast. But it is currently top of my mum's priorities/worries again hence the repeat post with the specific concerns about Strategic Asset Protection.

I looked on that search engine and suggested some to her. She has this afternoon made an appointment with one in her town. And will be ghosting SAP if they follow up on their quote!

I am sure a Step solicitor will give her good advice.
Worth noting though that some of these methods to reduce IHT liability have their own cost ( setting up and running trusts etc ), and HMRC are not daft, so the actual tax avoidance can be limited.
Also it brings complications for the Executor of the estate when that time comes, to have these types of arrangements in place, and probably they will need to pay for professional help as well.
Maybe suggest to her in advance that she will probably save some tax, but maybe not as much as she hopes and there will be considerable cost and complexities involved. A kind of expectation management !
One simple and easy way to reduce your IHT bill, is to make large charitable donations, either before you die or in your will.

poseidon1

VT82 said:

Nothing came from the 2023 family discussions into the matter. Circumstances on who planned to live where etc were a moving feast. But it is currently top of my mum's priorities/worries again hence the repeat post with the specific concerns about Strategic Asset Protection.

I looked on that search engine and suggested some to her. She has this afternoon made an appointment with one in her town. And will be ghosting SAP if they follow up on their quote!

From the information you provided, the main focus ( in my view)  will be to what extent your mother  is prepared to give up the income stream from one or other of the commercial property or BTL company.

 For example if the commercial property is well under £500k in value I would explore a wife and husband joint gift of the property into discretionary trust ( for maximum flexibility), with any gains heldover into the hands of the trustees ( which could be mum and dad ). Both then survive 7 years with perhaps 7 year level term insurance to mitigate advanced use of their nil rate bands, at the end of that period the property falls out of her estate.

Disadvantage is trust income tax at 45%, but some or all of this recoverable if income distributed to basic rate or zero rate beneficiaries. Trust also has 10 yearly IHT reporting , but by then it will have two lots of NRBs of it's own ( £650k currently) which hopefully shelters any future investment growth for the property. Even if there is an unexpected spurt in value, the IHT  tax charge is only at 6% of value exceeding the NRBs ( much smaller than a 40% charge) , with HMRC allowing the charge to be paid over 10 years if desired.

The other disadvantage is the base cost in the trustees' hands would remain your mother's original purchase cost, so a long tail of CGT exposure could remain if your mother originally acquired it at a relatively low figure.

Would be interested to hear the outcome of the exploratory meeting with your mum, given that her estate largely comprises relatively illiquid assets.