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  • FIRST POST
    • Goldman2020
    • By Goldman2020 11th May 19, 7:32 PM
    • 32Posts
    • 4Thanks
    Goldman2020
    April King
    • #1
    • 11th May 19, 7:32 PM
    April King 11th May 19 at 7:32 PM
    Does anyone have experience of using April King for the writing of Wills?
Page 2
    • getmore4less
    • By getmore4less 13th May 19, 2:17 PM
    • 36,190 Posts
    • 22,284 Thanks
    getmore4less
    getmore4less ....................You missed the question.

    Gifting half property to CHILDREN with spouse having a life interest, if half house above nil rate band, would that trigger tax payments?
    Originally posted by SeniorSam
    No I did not miss the question, you did not understand the answer.


    NO TAX bcause it ALL gets spouse exemption going into the trust due to the life interest being the spouse.

    Who the eventul beneficiaries of the trust is not relevant at this point.
    • SeniorSam
    • By SeniorSam 13th May 19, 3:58 PM
    • 1,251 Posts
    • 649 Thanks
    SeniorSam
    Thank you. I thought that gifting the property to the children, rather than the spouse but with the Lifetime interest for the spouse may attract excess inheritance tax. That's really good news then.

    So with a high end property of say £1,500,000, the first to die could gift their half (£750,000) into Trust and not worry about any excess inheritance tax. I appreciate you confirming that
    Last edited by SeniorSam; 13-05-2019 at 4:03 PM. Reason: addition
    I'm a retired IFA who specialised for many years in Inheritance Tax, Wills and Trusts. I cannot offer advice now, so my comments are just meant to be helpful.
    • getmore4less
    • By getmore4less 13th May 19, 5:14 PM
    • 36,190 Posts
    • 22,284 Thanks
    getmore4less
    Thank you. I thought that gifting the property to the children, rather than the spouse but with the Lifetime interest for the spouse may attract excess inheritance tax. That's really good news then.

    So with a high end property of say £1,500,000, the first to die could gift their half (£750,000) into Trust and not worry about any excess inheritance tax. I appreciate you confirming that
    Originally posted by SeniorSam
    On first death,

    The IHT gremlins kick in on second death as the value in the trust falls on the spouse estate when they die if they don't take steps to mitigate IHT.

    The residential nil rate band throws a few curveball should the children die before they inherit as remainderman.
    • SeniorSam
    • By SeniorSam 14th May 19, 6:30 AM
    • 1,251 Posts
    • 649 Thanks
    SeniorSam
    IHT kicks in on second death but are you saying that the nil rate bands of both still applies?

    In which case, should caution be applied to limit the value of that part of the house gifted in Trust to the children on first death to keep within the nil rate band and to avoid exceeding the allowance of both on second death?
    I'm a retired IFA who specialised for many years in Inheritance Tax, Wills and Trusts. I cannot offer advice now, so my comments are just meant to be helpful.
    • Tom99
    • By Tom99 14th May 19, 7:31 AM
    • 4,238 Posts
    • 2,974 Thanks
    Tom99
    IHT kicks in on second death but are you saying that the nil rate bands of both still applies?
    In which case, should caution be applied to limit the value of that part of the house gifted in Trust to the children on first death to keep within the nil rate band and to avoid exceeding the allowance of both on second death?
    Originally posted by SeniorSam
    I can't see how that would help since you may be bring forward the IHT bill by increasing the IHT bill on the 1st death and will reduce the nil rate band passing to the survivor. Better to pass everything to the surviving spouse and for the survivor to make PETs and hope to last 7yrs.
    • SeniorSam
    • By SeniorSam 14th May 19, 7:37 AM
    • 1,251 Posts
    • 649 Thanks
    SeniorSam
    Tom99, It really depends on the gamble that long term ca=re will not be needed for the second to die, as all of the estate (bar PET's) could be needed to meet that cost and possibly nothing left for the family.
    I'm a retired IFA who specialised for many years in Inheritance Tax, Wills and Trusts. I cannot offer advice now, so my comments are just meant to be helpful.
    • Tom99
    • By Tom99 14th May 19, 7:46 AM
    • 4,238 Posts
    • 2,974 Thanks
    Tom99
    Tom99, It really depends on the gamble that long term care will not be needed for the second to die, as all of the estate (bar PET's) could be needed to meet that cost and possibly nothing left for the family.
    Originally posted by SeniorSam
    But surely the 50% of the house with a lifetime right to occupy cannot be use for care home fees anyway (which is the main reason for the trust) whether 50% is worth £300k or £600k
    • Yorkshireman99
    • By Yorkshireman99 14th May 19, 8:02 AM
    • 5,381 Posts
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    Yorkshireman99
    But surely the 50% of the house with a lifetime right to occupy cannot be use for care home fees anyway (which is the main reason for the trust) whether 50% is worth £300k or £600k
    Originally posted by Tom99
    There is a potential problem with these trusts. I don’t know if this has been tested in court, but could be seen as deliberate deprivation of assets as their main purpose seems to be just that. IMHO it is a huge loophole that has not been closed. Constructive comments welcome.
    • AnotherJoe
    • By AnotherJoe 14th May 19, 8:56 AM
    • 14,579 Posts
    • 17,399 Thanks
    AnotherJoe
    The main purpose can be to ensure than the beneficiaries are not dispossessed by a future will from the surviving spouse, classically the "gold digger" new wife or husband. I had this discussion with my solicitor last week as we were undoing this for our new will and her comment was all regards this was the main purpose of it.

    Also AIUI if this is being done before there is any "reasonable expectation" of care home fees being needed then you are OK. That along with its main purpose being the above reason probably makes it OK as long as both are in good health.
    • Browntoa
    • By Browntoa 14th May 19, 9:03 AM
    • 35,027 Posts
    • 41,107 Thanks
    Browntoa
    Interesting read , can be declared as deprivation of assets and reversed.

    https://www.roydswithyking.com/care-home-fees-deliberate-deprivation-assets-word-warning/
    I'm the Board Guide of the Referrers ,Telephones, Pensions , Shop Don't drop ,over 50's , Boost your income and Discount Code boards which means I volunteer to help get your forum questions answered and keep the forum runnning smoothly .However, please remember, board guides don't read every post. If you spot an inappropriate or illegal post please report it to forumteam@moneysavingexpert.com Any views are mine and not the official line of MoneySavingExpert.
    • Browntoa
    • By Browntoa 14th May 19, 9:08 AM
    • 35,027 Posts
    • 41,107 Thanks
    Browntoa
    And I personally know of someone who gifted property to her daughter who sold the property 2 years later leaving her homeless.
    I'm the Board Guide of the Referrers ,Telephones, Pensions , Shop Don't drop ,over 50's , Boost your income and Discount Code boards which means I volunteer to help get your forum questions answered and keep the forum runnning smoothly .However, please remember, board guides don't read every post. If you spot an inappropriate or illegal post please report it to forumteam@moneysavingexpert.com Any views are mine and not the official line of MoneySavingExpert.
    • nom de plume
    • By nom de plume 14th May 19, 9:39 AM
    • 855 Posts
    • 781 Thanks
    nom de plume
    Interesting read , can be declared as deprivation of assets and reversed.

    https://www.roydswithyking.com/care-home-fees-deliberate-deprivation-assets-word-warning/
    Originally posted by Browntoa

    That example appeared to relate to the whole property rather than 50% so perhaps not unsurprising.
    • Browntoa
    • By Browntoa 14th May 19, 9:53 AM
    • 35,027 Posts
    • 41,107 Thanks
    Browntoa
    Property jointly owned is a mandatory disregard for care fee's if the other partner still lives there anyway , so it's only an issue for a surviving partner. No charge on the property is made if it's a mandatory disregard
    I'm the Board Guide of the Referrers ,Telephones, Pensions , Shop Don't drop ,over 50's , Boost your income and Discount Code boards which means I volunteer to help get your forum questions answered and keep the forum runnning smoothly .However, please remember, board guides don't read every post. If you spot an inappropriate or illegal post please report it to forumteam@moneysavingexpert.com Any views are mine and not the official line of MoneySavingExpert.
    • getmore4less
    • By getmore4less 14th May 19, 2:24 PM
    • 36,190 Posts
    • 22,284 Thanks
    getmore4less
    There is a potential problem with these trusts. I donít know if this has been tested in court, but could be seen as deliberate deprivation of assets as their main purpose seems to be just that. IMHO it is a huge loophole that has not been closed. Constructive comments welcome.
    Originally posted by Yorkshireman99
    No deprivation the doner is dead.
    • getmore4less
    • By getmore4less 14th May 19, 2:35 PM
    • 36,190 Posts
    • 22,284 Thanks
    getmore4less
    IHT kicks in on second death but are you saying that the nil rate bands of both still applies?

    In which case, should caution be applied to limit the value of that part of the house gifted in Trust to the children on first death to keep within the nil rate band and to avoid exceeding the allowance of both on second death?
    Originally posted by SeniorSam
    No.

    Any other option(other than giving it to the spouse or charity) involves using up the nil rate band on first death and if that runs out IHT.
    • getmore4less
    • By getmore4less 14th May 19, 2:40 PM
    • 36,190 Posts
    • 22,284 Thanks
    getmore4less
    Interesting read , can be declared as deprivation of assets and reversed.

    https://www.roydswithyking.com/care-home-fees-deliberate-deprivation-assets-word-warning/
    Originally posted by Browntoa
    Does not apply to tenants in common and life interests
    • Yorkshireman99
    • By Yorkshireman99 14th May 19, 3:50 PM
    • 5,381 Posts
    • 4,540 Thanks
    Yorkshireman99
    No deprivation the doner is dead.
    Originally posted by getmore4less
    I am talking about trust setup long BEFORE the donor dies.
    • Yorkshireman99
    • By Yorkshireman99 14th May 19, 3:52 PM
    • 5,381 Posts
    • 4,540 Thanks
    Yorkshireman99
    Does not apply to tenants in common and life interests
    Originally posted by getmore4less
    Your reply is opposite to what councils claim.
    • getmore4less
    • By getmore4less 14th May 19, 5:27 PM
    • 36,190 Posts
    • 22,284 Thanks
    getmore4less
    I am talking about trust setup long BEFORE the donor dies.
    Originally posted by Yorkshireman99
    In those cases the doners may have deprivation if their share is needed for their care, but the tax changes make them less effective for IHT mitigation.
    • getmore4less
    • By getmore4less 14th May 19, 5:29 PM
    • 36,190 Posts
    • 22,284 Thanks
    getmore4less
    Your reply is opposite to what councils claim.
    Originally posted by Yorkshireman99
    Where do councils say they can access assets never belonging to the person that needs care.?
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