Diabolical pension inheritance tax on death 2027.

Triumph13

If passing inheritance you receive on to your kids, I would strongly recommend doing it via deed of variation, just in case you die within 7 years. That way you are taken out of the loop entirely.

BlackKnightMonty

Remember you can gift £3k a year inheritance tax free.

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81983971#Comment_81983971

Not just £3K: https://www.gov.uk/inheritance-tax/gifts

Grumpy_chap

He and mum had put money aside to bequeth to their kids that was their plan. Getting it in your 60s when your kids are in their 30s doesn't necessarily seem like the best use of that generational wealth.

Yes, it seems to be something about the mindset of that generation that they must hold on to cash in the bank rather than spend it so they can pass it on to the next generation.

It seems a bit absurd to me.

If they have worked hard to be in a position to make a choice about "excess" (to them) wealth, why not reap the rewards directly and spend the money on themselves in whatever way they choose?

If the purpose really is to be able to pass the money down, then waiting until your children are passed retirement age is often too late for the money passed down to make a meaningful difference. We actually had this conversation with my Mother a few number of years back about gifting the money while she is alive to her grandchildren as it would make a massive difference allowing the grandchildren to get on the property ladder. (I felt safe in making that suggestion as we do not have children so this was not in any way feathering my own nest.) My mother baulked at the offensiveness of such an idea. In fact, all our nieces and nephews now have properties of their own so the logical thing would be for Mum's money to go to the great grandchildren.

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/81984219#Comment_81984219

I "spend" some of my excess income on gifts to family. I will be paying for the kids university fees and if I return to the UK I will start a regular schedule of "gifts from excess income" that complies with HMRC rules. In my final years I hope/plan to sell any real estate I own and give the money to family and live in rented accommodation. Ideally it would be in a genteel hotel, the sort you find in Agatha Christie stories, but they don't exist anymore. I like what Elaine Stritch did - she lived at the Savoy for a long time and didn't pay anything other than agreeing to do ads and promotions for them.

bjorn_toby_wilde

https://forums.moneysavingexpert.com/discussion/comment/81984267#Comment_81984267

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NormalNorman

Although I could live for another say ~30 years, not pinned down the exact year yet, cleaned up all my finances with just the accounts I need. Also got dad to send money direct to daughters account instead of mine whenever he wants to drop her a few quid for fuel, takeaway, uni etc to remove myself from the loop as others have said.

With having stoozed the living daylights out of everything from the year 2000, claimed dozens of bank switching bonuses and banned from matched betting it’s time to let the credit report detox as well as making life simpler for executors. For example, no longer circulating ~£10k+ a month to harvest bank rewards.

Anyway, Mum recently passed away leaving £100,000s in index linked savings certificates and ISAs. Say half a million plus pensions. Dad says she wanted to hang onto it in case of care even though she never wanted to see the inside of a care home and pass away at home which is what she did. What saddens me is she could have spent and lived even more than she did if it weren’t for this underlying care home narrative.

I think Dad will just about squeeze under the IHT threshold and it’s good to see him out spending on season tickets, lots of meals out with his friends etc. Stop saving money dad!

Yeah the money, property will come to myself and sibling but technically don’t really need it. It will give daughter and nephew a boost for sure.

A mate who inherited much more got his three kids mortgage free, made his home even nicer but mostly travels the world or HMRC will want even more such is the tax net now, lol.

mrklaw

agree. I don’t expect to get much from my parents, and not sure about my wife’s side. But we’re almost set now so I think we may even consider a deed of variation to our kids directly (although they’re a bit young and still risk being stupid with it). Even if we took it, it’d go immediately into a ‘gift when appropriate and not too late’ pot

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/81984374#Comment_81984374

…and I could stay at The Old Swan in Harrogate where Christie spent her "lost days". But neither hotel offers extended stays and the other guests would have to include a dodgy retired colonel, a few spinsters, a spiv and an American movie star. So I don't think there's any chance of that happening.

Seriously though, for someone without a spouse or children there could be a big IHT bill on their real estate so renting might be a solution as long as the money can be safely gifted. Having a comfortable level of annuity/SP/DB pension income helps to make the gifting of large amounts of capital less of a worry.

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/81984374#Comment_81984374

It is nice there - my brother stayed with his wife for his Birthday.