My parents assests - inheritance tax

viks007

Hi, i am after some advice about my parents assets and how we can avoid as much inheritance tax as possible! I am complete beginner at this so please bare with me. They have a mortgage free property and some savings. They have asked me to look into this, when the time arrives how my and my brother and sister can deal with all this without paying all the inhetitance tax!

Grumpy_chap

Is their total combined estate of a size where IHT is likely to be a concern?

Could be a combined allowance of around £1m.

They need to consider their needs first, including any potential care needs.

Be aware that we regularly read threads in these forums where actions taken relative to IHT do nothing to reduce that liability and manage to create some additional tax liability that would not have arisen naturally.

Hi, i am after some advice about my parents assets and how we can avoid as much inheritance tax as possible! I am complete beginner at this so please bare with me. They have a mortgage free property and some savings. They have asked me to look into this, when the time arrives how my and my brother and sister can deal with all this without paying all the inhetitance tax!

QrizB

Is their total combined estate of a size where IHT is likely to be a concern? Could be a combined allowance of around £1m.

That was going to be my question, too. The OP's "a mortgage free property and some savings" could be £200k or could be £20M+, and a suitable course of action will depend whereabouts in that range they expect to be.

Albermarle

Assuming the estate would actually be liable for IHT ( >90% are not) then the two easiest courses of action for your parents to reduce any IHT bill are:

1. Spend more when alive
2. Make gifts to family now, rather than in their will.

A third one could be give money to charity, either when alive or in their will.

Avoid any schemes including trusts, or putting their home in your names whilst they are still alive.

Also avoiding tax legally is fine, but they should not make it a priority over making their lives secure and comfortable as they get older.

Read this:

Ways to legally reduce your Inheritance Tax bill

RAS

Also be aware that when care needs are an issue, the LA had a couple of options:

Demand that money disbursed is returned by those to whom it was given.

Decline to fund care.

Again, if you've £20m and are 55 years old, gifts aren't a problem if you leave yourself about 10% to fund your own needs.

At £200k, almost any gifts could be queried, particularly over pension age.

Keep_pedalling

If the property is worth at least £350 and their total assets are below £1M their estate will pay no IHT. If it’s above that the best thing they go do is enjoy spending some of their wealth on themselves and making the odd family gift.

elsien

https://forums.moneysavingexpert.com/discussion/comment/82140068#Comment_82140068

Not necessarily. If you are thinking of deliberate deprivation of assets for care, it has to be reasonably foreseeable that care will be required (for example already declining health. Or a centenarian.) and also that any gifts were given with the express purpose of avoiding care costs.

Retirement age might be someone who is 67, perfectly fit and healthy and run marathons. Age alone is not enough for gifts to be queried, as a rule.

poseidon1

https://forums.moneysavingexpert.com/discussion/6683663/my-parents-assests-inheritance-tax

Far too vague a request.

Provide some numbers for the forum to get its teeth into, eg house value, value of savings and investments, value of any DC pensions/ Sipps, any potential inheritances from their parents ( if still living), etc.

Makingabobor2

You really need to say value of property & savings

LightFlare

easy way to avoid IHT ( or some) = spend/use your assets

It’s something I’ve been encouraging my 86yr old mum to do.

It’s her money, enjoy it while she can