Inheritance tax help

Keep_pedalling

GillyB26 said:

kimwp said:

poseidon1 said:

kimwp said:

Sorry if I missed it, but can't the tenant pay the inheritance tax under an agreement that he can remain in the house (paying bills, repairs etc)

You missed the fact that the Life Tenant is of the entirely  bogus view that the 15 year old nephew is responsible for paying the IHT on the property.  

I got that, I meant as an option to present to the tenant when it's pointed out that legally the trustees can sell the house to pay the iht. I'm not sure how that would work though.

Yes, I am hoping we can come to an agreement along the line of he pays the IHT which he is liable for anyway and stays in the house as long as he pays any expenses relating to the property. Especially as I have just found out he is getting over £100k payout from the deceased's private pension. My son and I have a meeting with my Solicitor tomorrow, they are STEP registered and one of the Partners specialises in contentious wills.

If he pays the IHT then he should also have a financial interest in the property in the form of a minor share of the house ownership. 

kimwp

GillyB26 said:

kimwp said:

poseidon1 said:

kimwp said:

Sorry if I missed it, but can't the tenant pay the inheritance tax under an agreement that he can remain in the house (paying bills, repairs etc)

You missed the fact that the Life Tenant is of the entirely  bogus view that the 15 year old nephew is responsible for paying the IHT on the property.  

I got that, I meant as an option to present to the tenant when it's pointed out that legally the trustees can sell the house to pay the iht. I'm not sure how that would work though.

Yes, I am hoping we can come to an agreement along the line of he pays the IHT which he is liable for anyway and stays in the house as long as he pays any expenses relating to the property. Especially as I have just found out he is getting over £100k payout from the deceased's private pension. My son and I have a meeting with my Solicitor tomorrow, they are STEP registered and one of the Partners specialises in contentious wills.

Thanks. Remember that he isn't liable for the iht - the estate is liable to pay it from the sale of the house.

kimwp

Keep_pedalling said:

GillyB26 said:

kimwp said:

poseidon1 said:

kimwp said:

Sorry if I missed it, but can't the tenant pay the inheritance tax under an agreement that he can remain in the house (paying bills, repairs etc)

You missed the fact that the Life Tenant is of the entirely  bogus view that the 15 year old nephew is responsible for paying the IHT on the property.  

I got that, I meant as an option to present to the tenant when it's pointed out that legally the trustees can sell the house to pay the iht. I'm not sure how that would work though.

Yes, I am hoping we can come to an agreement along the line of he pays the IHT which he is liable for anyway and stays in the house as long as he pays any expenses relating to the property. Especially as I have just found out he is getting over £100k payout from the deceased's private pension. My son and I have a meeting with my Solicitor tomorrow, they are STEP registered and one of the Partners specialises in contentious wills.

If he pays the IHT then he should also have a financial interest in the property in the form of a minor share of the house ownership. 

This is what I can't figure out. If he pays the iht, he's not buying part of the house, he is paying to avoid the house having to be sold to pay the iht. So he shouldn't own any part of the house. I guess it comes down to what the parties can agree on.

I would try to honour the aunts wishes though, even if the will wasn't quite in line with them and take a hit on the inheritance if needed, the son will still get a nice sum when his aunt's partner dies.

Keep_pedalling

kimwp said:

Keep_pedalling said:

GillyB26 said:

kimwp said:

poseidon1 said:

kimwp said:

Sorry if I missed it, but can't the tenant pay the inheritance tax under an agreement that he can remain in the house (paying bills, repairs etc)

You missed the fact that the Life Tenant is of the entirely  bogus view that the 15 year old nephew is responsible for paying the IHT on the property.  

I got that, I meant as an option to present to the tenant when it's pointed out that legally the trustees can sell the house to pay the iht. I'm not sure how that would work though.

Yes, I am hoping we can come to an agreement along the line of he pays the IHT which he is liable for anyway and stays in the house as long as he pays any expenses relating to the property. Especially as I have just found out he is getting over £100k payout from the deceased's private pension. My son and I have a meeting with my Solicitor tomorrow, they are STEP registered and one of the Partners specialises in contentious wills.

If he pays the IHT then he should also have a financial interest in the property in the form of a minor share of the house ownership. 

This is what I can't figure out. If he pays the iht, he's not buying part of the house, he is paying to avoid the house having to be sold to pay the iht. So he shouldn't own any part of the house. I guess it comes down to what the parties can agree on.

I would try to honour the aunts wishes though, even if the will wasn't quite in line with them and take a hit on the inheritance if needed, the son will still get a nice sum when his aunt's partner dies.

If the estate pays the IHT by selling the house for £450k the remaining £390k goes into a trust which eventually will come to your son. If selling the house can be avoided by him paying the £60k then the value of the trust is increased by £60k so your son ends up inheriting a larger sum all of which has come from the partner not the estate. To be fair the partner that should give him a 13.33% share of the house with the rest held in trust.

This would probable be a better option for you son than selling the house as the partner would be receiving all the income from the trust, so any growth in the capital may not keep up with inflation the way a 86.66% of a residential home would. 

poppystar

kimwp said:

Keep_pedalling said:

GillyB26 said:

kimwp said:

poseidon1 said:

kimwp said:

Sorry if I missed it, but can't the tenant pay the inheritance tax under an agreement that he can remain in the house (paying bills, repairs etc)

You missed the fact that the Life Tenant is of the entirely  bogus view that the 15 year old nephew is responsible for paying the IHT on the property.  

I got that, I meant as an option to present to the tenant when it's pointed out that legally the trustees can sell the house to pay the iht. I'm not sure how that would work though.

Yes, I am hoping we can come to an agreement along the line of he pays the IHT which he is liable for anyway and stays in the house as long as he pays any expenses relating to the property. Especially as I have just found out he is getting over £100k payout from the deceased's private pension. My son and I have a meeting with my Solicitor tomorrow, they are STEP registered and one of the Partners specialises in contentious wills.

If he pays the IHT then he should also have a financial interest in the property in the form of a minor share of the house ownership. 

This is what I can't figure out. If he pays the iht, he's not buying part of the house, he is paying to avoid the house having to be sold to pay the iht. So he shouldn't own any part of the house. I guess it comes down to what the parties can agree on.

I would try to honour the aunts wishes though, even if the will wasn't quite in line with them and take a hit on the inheritance if needed, the son will still get a nice sum when his aunt's partner dies.

The IHT though is a debt owed by the estate not him. So if he pays it out of his own money not from the sale of the property he is effectively owed that money. The estate can’t pay him anymore than it could pay the IHT unless the house is sold so the only way to recompense him for providing the money would be to assign a part of the house ownership equivalent to the iht amount. This still leaves your son with exactly the same amount at the end of the day ie the value of house less the amount of IHT. 

kimwp

Ah, that makes sense, thank you for explaining