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    • TBC15
    • By TBC15 12th Oct 18, 5:57 PM
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    TBC15
    IHT planning
    • #1
    • 12th Oct 18, 5:57 PM
    IHT planning 12th Oct 18 at 5:57 PM
    In the event of my death, could my wife “marry” my single younger brother for IHT purposes?
Page 1
    • Keep pedalling
    • By Keep pedalling 12th Oct 18, 11:00 PM
    • 5,556 Posts
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    Keep pedalling
    • #2
    • 12th Oct 18, 11:00 PM
    • #2
    • 12th Oct 18, 11:00 PM
    In what way do you think this could reduce an IHT liability?
    • getmore4less
    • By getmore4less 12th Oct 18, 11:07 PM
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    getmore4less
    • #3
    • 12th Oct 18, 11:07 PM
    • #3
    • 12th Oct 18, 11:07 PM
    Spouse exemption when the new spouse dies.

    It is an unused loophole in IHT,

    chain marriage/civil partners and using up nil rate bands rather than transferring to offload from the chain. .
    • Keep pedalling
    • By Keep pedalling 12th Oct 18, 11:41 PM
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    Keep pedalling
    • #4
    • 12th Oct 18, 11:41 PM
    • #4
    • 12th Oct 18, 11:41 PM
    In the event of my death, could my wife “marry” my single younger brother for IHT purposes?
    Originally posted by TBC15
    Spouse exemption when the new spouse dies.

    It is an unused loophole in IHT,

    chain marriage/civil partners and using up nil rate bands rather than transferring to offload from the chain. .
    Originally posted by getmore4less
    But that would require the new spouse to die first. Is Mrs OP a black widow?
    • getmore4less
    • By getmore4less 13th Oct 18, 1:01 AM
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    getmore4less
    • #5
    • 13th Oct 18, 1:01 AM
    • #5
    • 13th Oct 18, 1:01 AM
    You chain DOWN the ages and never pay any IHT.

    As the plan is to remarry you don't need the transferable nil rate band so can offload that at each death, if kids thats 1/2million soon.
    • TBC15
    • By TBC15 13th Oct 18, 6:04 AM
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    TBC15
    • #6
    • 13th Oct 18, 6:04 AM
    • #6
    • 13th Oct 18, 6:04 AM
    Current possible scenario.

    I die, wife inherits the lot tax free.
    Wife dies younger brother gets hammered for CGT.

    Proposed scenario

    I die, wife inherits the lot tax free.
    Wife marries my younger brother.
    Wife dies younger brother inherits tax free.
    • HappyHarry
    • By HappyHarry 13th Oct 18, 8:06 AM
    • 780 Posts
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    HappyHarry
    • #7
    • 13th Oct 18, 8:06 AM
    • #7
    • 13th Oct 18, 8:06 AM
    Current possible scenario.

    I die, wife inherits the lot tax free.
    Wife dies younger brother gets hammered for CGT.

    Proposed scenario

    I die, wife inherits the lot tax free.
    Wife marries my younger brother.e
    Wife dies younger brother inherits tax free.
    Originally posted by TBC15
    Assuming you mean IHT rather than CGT, then yes, this works, providing everyone dies in the right order.

    It becomes far more problematic if wife wants to leave her younger brother anything 😀
    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
    • Keep pedalling
    • By Keep pedalling 13th Oct 18, 9:27 AM
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    • #8
    • 13th Oct 18, 9:27 AM
    • #8
    • 13th Oct 18, 9:27 AM
    So all you need is an endless supply of childless single people willing to engage in a marriage of convenience.

    They also need to be willing to die in the right order, and be honest enough not to run off with the money.

    I wonder why lots of people are not doing it ��
    • Sibbers123
    • By Sibbers123 13th Oct 18, 11:38 AM
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    Sibbers123
    • #9
    • 13th Oct 18, 11:38 AM
    • #9
    • 13th Oct 18, 11:38 AM
    It effectively works, but the reason why most people don't do this is that;
    • You need someone for your widow to marry (i.e. a single relative) - this must be legal - you can't marry your own family for obvious reasons
    • You need a lot of trust in your widow to fulfil your wishes. They can leave the estate to who they wish.

    Also, doing it this way, you are effectively wasting one of your £325k nil rate bands. The maximum nil rate band anyone can have is 200% of the current nil rate band, so on death of younger brother, he will have a nil rate band of £650,000 (his and your wife's) - yours is effectively wasted so you may as well give £325k directly to your brother...
    • TBC15
    • By TBC15 13th Oct 18, 6:27 PM
    • 598 Posts
    • 300 Thanks
    TBC15
    It effectively works, but the reason why most people don't do this is that;
    • You need someone for your widow to marry (i.e. a single relative) - this must be legal - you can't marry your own family for obvious reasons
    • You need a lot of trust in your widow to fulfil your wishes. They can leave the estate to who they wish.

    Also, doing it this way, you are effectively wasting one of your £325k nil rate bands. The maximum nil rate band anyone can have is 200% of the current nil rate band, so on death of younger brother, he will have a nil rate band of £650,000 (his and your wife's) - yours is effectively wasted so you may as well give £325k directly to your brother...
    Originally posted by Sibbers123
    If the estate is worth more than 2 million I can still see advantages from an IHT point of view, paperwork if nothing else.

    Quick update shouldn’t it be 650,000 plus 125000 out of the house?
    Last edited by TBC15; 13-10-2018 at 6:31 PM. Reason: update
    • Keep pedalling
    • By Keep pedalling 13th Oct 18, 7:31 PM
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    Keep pedalling
    If the estate is worth more than 2 million I can still see advantages from an IHT point of view, paperwork if nothing else.

    Quick update shouldn’t it be 650,000 plus 125000 out of the house?
    Originally posted by TBC15
    No the residential nil rate band only applies if leaving your estate to your children or their offspring.

    If you have £2M to leave then there are other things you should be doing to reduce IHT, but as it sounds like you have no children why are you even bothered about it?
    • C_Mababejive
    • By C_Mababejive 13th Oct 18, 10:04 PM
    • 10,619 Posts
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    C_Mababejive
    Just spend and enjoy. Cant take it with you . The tax man will steal it away./
    Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
    • Sibbers123
    • By Sibbers123 14th Oct 18, 9:32 AM
    • 24 Posts
    • 15 Thanks
    Sibbers123
    If the estate is worth more than 2 million I can still see advantages from an IHT point of view, paperwork if nothing else.

    Quick update shouldn’t it be 650,000 plus 125000 out of the house?
    Originally posted by TBC15
    To be blunt, with an estate in excess of £2m it would be best advised to use some of your estate to get paid for tailored advice.

    IHT is one of the taxes where even basic planning is really effective and can save £,000's in IHT.

    But don't put blinkers on. Remember your main objective - i.e. gifting your estate to your brother which should take precedence over saving tax in my opinion.

    If you want your wife to enjoy your estate until her death, and then the estate to go to your brother then a life interest trust is probably what you want, giving your wife beneficial interest until her death, and then on her death, the estate will revert to your brother.

    P.S. The residential NRB only applies if you leave your property to lineal descendants so unless you have children/step children or grandchildren you will not benefit from this unfortunately.
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