IHT


D

Dave INM

Hi,

Having just paid Inheritance Tax on my Mother estate, I wonder this could
have been avoided.


I would rather my estate went to my sons rather than to the IR.

Basically, the only asset I have is my house , worth maybe £300,000.00.

Would it be an advantage to give my two sons a 1/4 share each now, with a
1/4 share for both my wife and me.

That way our estate would be worth say £150000.00, less than the
Inheritance tax threshold.

Or is it a case, the taxman gets his share

Thank you
 
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R

Ronald Raygun

Dave said:
I would rather my estate went to my sons rather than to the IR.

Basically, the only asset I have is my house , worth maybe £300,000.00.

Would it be an advantage to give my two sons a 1/4 share each now, with a
1/4 share for both my wife and me.

That way our estate would be worth say £150000.00, less than the
Inheritance tax threshold.
If you and the wife already own half the house each, then each of
your estates is already only worth 150k and hence below the IHT
threshold. Simply make sure your wills leave your respective halves
of the house directly to your sons instead of to each other. Use
a solicitor to make sure it's done right. You can protect each
other against the sons forcing the survivor to sell up so they can
cash in.
 
T

Troy Steadman

Hi,

Having just paid Inheritance Tax on my Mother estate, I wonder this could
have been avoided.


I would rather my estate went to my sons rather than to the IR.

Basically, the only asset I have is my house , worth maybe £300,000.00.

Would it be an advantage to give my two sons a 1/4 share each now, with a
1/4 share for both my wife and me.
If you give it away and continue to live in it, that is a "gift with
reservation" and doesn't count as a gift for IHT purposes - unless your
sons live with you, and will continue to live with you for 7 years.

There are many other things you can do, look up "tenants in common" in
Google on this subject, and post more details. Are you retired? How do
you want/expect your life to pan out?


--
 
T

Troy Steadman

Ronald Raygun said:
If you and the wife already own half the house each, then each of
your estates is already only worth 150k and hence below the IHT
threshold...
And if you own the whole of the house there's no problem either:

"The matrimonial house of H and W is in the sole name of
H. He transfers it into the joint names of himself and his
wife, W, as tenants-in-common/or joint proprietors in
Scotland in equal shares. W dies three years later and
leaves her half share to a child C. C does not take up
residence in the property but leaves H in sole occupation.
H dies ten years later (see D.41).
This is not a GWR. As the original transfer was spouse
exempt, the GWR provisions do not apply even though
the donor had exclusive use and enjoyment of the gifted
half share following the death of W."

From the IR Advanced Instruction Manual.





--
 
D

Doug Ramage

Dave INM said:
Hi,

Having just paid Inheritance Tax on my Mother estate, I wonder this could
have been avoided.


I would rather my estate went to my sons rather than to the IR.

Basically, the only asset I have is my house , worth maybe £300,000.00.

Would it be an advantage to give my two sons a 1/4 share each now, with a
1/4 share for both my wife and me.

That way our estate would be worth say £150000.00, less than the
Inheritance tax threshold.

Or is it a case, the taxman gets his share

Thank you
Although it might not save any IHT re your mother's estate, have you
considered whether a Deed of Family Arrangement might be advantageous (e.g.
generation skipping etc). The time limit is 2 years from the date of your
mother's death.
 
D

Dave INM

Doug Ramage said:
Although it might not save any IHT re your mother's estate, have you
considered whether a Deed of Family Arrangement might be advantageous (e.g.
generation skipping etc). The time limit is 2 years from the date of your
mother's death.
I am 50,my wife is 45 and two sons aged 18 and 21

Dave
 
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T

Troy Steadman

Dave INM said:
I am 50,my wife is 45 and two sons aged 18 and 21

Dave
I think I would "wait and see". You have a long life ahead of you.
Suppose one of you dies in 10 years time when one son's business and
the other son's marriage is failing?
...you can protect each
other against the sons forcing the survivor to sell up so they can
cash in...
....but you can protect each other only so far. Bancruptcy or Divorce
could drive you or your wife from your home, and hey! better the money
goes to the taxman than to "the heartless bitch who cheated on my
son..,", etc.

How about:

When the kids move out sell the house and trade down, give them £3,000
pa each using 2 years annual gift allowance, take the wife on a nice
cruise etc.
 
D

Dave INM

Troy Steadman said:
"Dave INM" <SM@BT.com.notreally> wrote in message

I think I would "wait and see". You have a long life ahead of you.
Suppose one of you dies in 10 years time when one son's business and
the other son's marriage is failing?
Thanks for this advice,I suppose you can be to involved to see the full
picture.

On BF for 10 years
 
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