Giving assets away and living on pension benefit

taliesin

To make sure Pinzy understands julieq's point:

If you haven't already received the legacy, you can apply to have the will changed (a "deed of variation") so that the money goes straight to someone else. Changing the will means that you will never have the money, so issues such as inheritance tax or (I think) deprivation of assets never arise. If you think this arrangement could help you, talk to the executor of the will and let him/her know that you are considering it, and do so as soon as possible, before the estate is disbursed.

SeniorSam

taliesin wrote: »

To make sure Pinzy understands julieq's point:

If you haven't already received the legacy, you can apply to have the will changed (a "deed of variation") so that the money goes straight to someone else. Changing the will means that you will never have the money, so issues such as inheritance tax or (I think) deprivation of assets never arise. If you think this arrangement could help you, talk to the executor of the will and let him/her know that you are considering it, and do so as soon as possible, before the estate is disbursed.

The beneficiaries of an estate can have the Will changed by Deed of Variation within two years of the death. All beneficiaties need to agree to the change and a solicitor will be able to do this if needed.

This would only help in respect of inheritance tax mitigation, but not for any State benefits as mentioed by others earlier .

Hope this helps.

Sam

bendix

While I have no problem with people doing whatever they can to avoid tax, the idea of someone giving away £700,000 with a view to then letting the state support them through benefits and housing benefit is, frankly, despicable.

Do people have no pride at all?

margaretclare

bendix wrote: »

While I have no problem with people doing whatever they can to avoid tax, the idea of someone giving away £700,000 with a view to then letting the state support them through benefits and housing benefit is, frankly, despicable.

Do people have no pride at all?

My opinion is the same as yours, although the idea of my ever having £700K is hypothetical, to say the least!

Whether people have pride or not I cannot say. In some cases perhaps they haven't. Perhaps there is some sort of idea out there that it's possible to live well on benefits: others do, it's our entitlement, paid in all our lives etc etc. This idea is fairly widespread, what I've described as 'pub talk'. If you ever hear people talking like this they can always argue it away, rationalise it, and the recent scandals about MPs' allowances add fuel to the fire. 'They're all at it, we paid for it, others can get it, why not us'.

For myself, having grown up in poverty (the kind of poverty that no one sees nowadays because there were no benefits, no human rights) it would scare me rigid the very thought of spending the last decades of my life in poverty. It would be even worse than when I was young, because one no longer has the physical ability to deal with it. I wouldn't want to be one of those we hear about who have to choose between 'heating and eating'. This is, effectively, what living into old age on benefits actually means. It doesn't mean living well, having expensive cars and plasma screens!

seven-day-weekend

Good posts bendix and margaretclare.

While I am all for people claiming what they are (legally) entitled to, the thought of giving away that amount of money in order to live frugally on a bit of Housing Benefit just because 'Mrs Jones gets it' seems insane - especially as the people must then spend the rest of their lives looking over their shoulders in case the authorities ever asked them what happened to all that money.

The interest would probably pay their rent and/or Council Tax anyway!

I honestly don't understand people who wish to do that.

Daytona

I referred to this thread from the associated newspapers This Is Money forum, which has received an insightful response concerning Capital Investment Bonds and deprivation of capital from Peter McGahan, Managing Director of Worldwide Financial Planning, a firm of specialist fee based independent financial advisers (IFAs).

The response is here -
http://boards.thisismoney.co.uk/tim/threadInd.jsp?forum=89&message=502643&thread=103670&start=0&msRange=30

and the full thread, for context, is here -
http://boards.thisismoney.co.uk/tim/threadnonInd.jsp?forum=89&thread=103670&start=0&msRange=30

property.advert

bendix wrote: »

While I have no problem with people doing whatever they can to avoid tax, the idea of someone giving away £700,000 with a view to then letting the state support them through benefits and housing benefit is, frankly, despicable.

Do people have no pride at all?

I believe that people get shafted by the state when they have saved or bought property throughout their lives when those who have squandered their income are taken care of. To me that is inequitable. Thus, I have no qualms in people doing anything to pass on their assets and claim the same as those who never made any provision.

I do agree that at certain levels it becomes a marginal call but as all current limits are woefully small, I cannot, hand on heart, accept that people should hand over all they have.

Perhaps longer term planning will move towards a time where we do not register assets in our names but in those of our children, such as a house, to get around this.