Inheritance tax

[Bear]

Come on he's not suggesting he is great at IT he's a taxation estate planner, but the fact he's got a website means he's more competent in your chosen profession than you are in his so stop whinging!

He can't spell either!

[expat]

The government takes tax hundreds of time from the same money - every time it changes hands.

Truly a Pearl of Wisdom. All common taxes are taxes on money changing hands. Why should this one be different?

[glashIFA@Paramount]

As Bradley says you can insure, but premiums can be high because it is an inevitibility. Whole life policies are sometimes used for this.

A couple of thing you can investigate which may mitigate the bill:-

1) If you have a partner and some property being joint tenants rather than tenants in common can help.

2) Any life policies etc should be written in trust.

3) Leave assets beyond your partner if possible, allowing partner a life interest through a will trust. [There may have been some changes here recently though]

A good solicitor should be pretty clued up on estate planning. Sort it out when you make your will.

Point 1 is the other way round. Most properties for married couples / partners are owned on a joint tenancy basis and this should be changed to a tenants in common basis for IHT planning.

There have been a lot of changes here regarding the tax treatment of trusts following Gordies last budget - definately an area for specialist advice.

An awful lot of solicitors do not have an extensive knowledge of the options regarding estate palnning which is why i have to provide advise and training to them. They still have the option of Deeds of Variation to wills for up to 2 years after death so they tend to rely on this for post death planning which is dangerous - especially given that there is a school of thought going round that deeds of variation will be withdrawn.

[glashIFA@Paramount]

Thanks for the replies.. but the IT is inbound -i.e. sole remaining elderly parent with terminal disease & a large estate - some tax planning done 15 years ago - gifting etc. but what remains is still substantial.

It sounds morbid - but I really want to minimise Gordon's take on the estate hence the need for specialist advice

most IHT planning centres around the 7 yr rule to allow assets to move out of the estate free of IHT (depending on what is left in the estate and any other provisions made). However this normally means giving up control and access to the capital which as someone pointed out earlier is a risky strategy. There are schemes which allow for monies to leave the estate totally free of IHT regardless of any other planning after a 2 yr period - not generally in the public domain but readily available and approved by the revenue and supported by case history.

[ASB]

Point 1 is the other way round. Most properties for married couples / partners are owned on a joint tenancy basis and this should be changed to a tenants in common basis for IHT planning.

Bugger. A one year old typo!

[Ardesco]

Though it seems most people just want to do it to spite the government. But it's not like the tax is 100%, it's only(!) 40% of everything over 300K. If the recipient has a big bill to pay, it's because they have inherited a lot. Why put yourself at risk of penury in old age to avoid someone else paying some tax on money that is just going to be given to them.

So if I make myself an amazing emprie that brings in millions I can't give it to my kids, instead I have to give the fecking government almost half of it despite the fact I have already paid them more than enough while I was alive.

What a load of old tosh.

[tim123]

So if I make myself an amazing emprie that brings in millions I can't give it to my kids, instead I have to give the fecking government almost half of it despite the fact I have already paid them more than enough while I was alive.

What a load of old tosh.

Of course you can give it to your kids, if you want, and don't mine them buggering off with it (as some will certainly do).

But I was referring here to the sort of capital that the average reader is going to have. Someone with a 500K house, who gives the capital away early so as to avoid the 7 year rule, may just find that they need it back in 10 or 20 years time.

tim

[Swiss Tony]

There are a number of things you can do and I would recommend sitting down with a specialist in this area. With Gordon f***ing Brown changing things as he goes along you need to stay one step ahead of him.

One very easy way of increasing your IHT allowance (if you are married) is to set up your will in the format of a nil rate band discretionary trust. This enables you to pass on your allowance to your partner, or vice versa, on your/ their demise hence double the allowance.

Again a good will writer will be able to point you in the right direction plus add all the other bells and whistles that can be done.

[Bear]

[QUOTE=Ardesco]So if I make myself an amazing emprie that brings in millions QUOTE]

What's an emprie and how do I make one?

[glashIFA@Paramount]

Of course you can give it to your kids, if you want, and don't mine them buggering off with it (as some will certainly do).

But I was referring here to the sort of capital that the average reader is going to have. Someone with a 500K house, who gives the capital away early so as to avoid the 7 year rule, may just find that they need it back in 10 or 20 years time.

tim

If you gift the house away and continue to "enjoy the benefit of it" i.e. carry on living in it then its a gift with reservation and will NEVER fall out of the estate for IHT purposes.

If only it was that simple.

Don't forget that this could well be considered "deliberate deprivation" too if you ever need long term care in the furture.