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Inheritance Tax

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nelliebee | 14:20 Mon 17th Mar 2014 | Personal Finance
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Has anyone had any experience of putting a property in to a trust fund. ( For my Grandchildren)? I fear that if anything should happen to me, the value of my property, plus any investments etc . plus any monies in bank accounts etc would take me over the limit allowed and the Government would take a substantial amount of the money I would like to leave my Son and Grandchildren, if this makes sense to anyone I would appreciate your comments on the best move to make.
Many Thanks
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to do it properly you need to consult a financial advisor. However, if it was easy, everyone would be doing it to avoid care home fees and/or inheritance tax
the iht threshold is 40% of anything OVER £325 k. plus if you have a partner pre-decease you, you get their unused threshold too. £325k is a substantial amount
It makes perfect sense
and you are a wise girl to think ahead
they say IHT is a voluntary tax

Having said that, and having identified that you need IHT planning advice
er asking us is perhaps not the wisest course

I was the subject of a wills trust and I have not decided to go down that road myself. My own feeling is that you should give the money to the people you want it to go to when you are alive....and explain why you are giving it

For a trust you need a specialised lawyer I think they are called STEP practitioners but I may be wrong.

In terms of giving your property away and retaining control - everyone wants to do that and good luck....
Black kat - the average price of a house in London is £ 1/2 m apparently so 325k hardly covers the lavatory and garage if you live in Islington.



Question Author
Thank you both, I need to be reducing my capital rather than increasing it. which I seem to be doing at the moment, I have a property which I rent out and a holiday home in Norfolk, plus the property I live in so I have adequate income, I just feel that having worked hard all my life, (as did my late Husband,) I really want my money to go to family rather than the Government. I will book an appoinment with a financial advisor a.s.a.p. Thank you both very much.
Nellie let us know how you get on, I asked a similar question recently and need to see a financial advisor too.
Nellie- do you have the double allowance of £650000 (i.e. with an unused allowance from a deceased spouse) or the single figure of £325000?
From what you say one or both of these figures will be exceeded so it is worth seekeng professional advice. You can give gifts out of income too- that may help. But of course the government will never get a huge share of it- the 40% tax is only payable on the amount over the threshold, so I think that would still leave a very substantial amount for your son and grandchildren
Question Author
Thank you Factor, My husband passed away, nearly six years ago so I don't think the double allowance still stands, but I will see an advisor, I have recently been in hospital, quite poorly, and I think it bought it home to me, that I ought to get my family's inheritances in order !!
Thanks again.
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Thanks Smurfchops , will let you know the outcome.
You should read this, nellie.
Is there a reason why you thing you don't get the unused allowance from your husband?
You may also need to ask an advisor about possible Capital Gains Tax issues relating to your other properties (I'm not familiar with whether that applies but it's worth checking)
Nellie, I just wanted to wish you well and have a speedy recovery xx
http://www.hmrc.gov.uk/inheritancetax/intro/transfer-threshold.htm
I'm not sure why my link didn't appear. Hope it helps
Nellie as long as your husband did not use any of his IT allowance when he died, ie. he left everything to you, your executor will be able to claim his full £325000 and add it to yours. There is only a problem when first death occurred before 1975.
So if the estate is worth £750000 (i.e. £100,000 above the double threshold) IHT will be due on 40% of £100,000- a tax of £40000. It's a lot but it still leaves £710000.
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Thank you all so much, I have made a list from all your suggestions ready for my appointment with a Financial Advisor........... I hope to get well, I have been prescribed warfarin etc for my problem and will be having regular hospital checks
Thank you again
FILaw left his property in trust to his wife for her life & to be divided between his kids on wifes death. (Perhaps to avoid wife sharing with replacement OH). Will was drawn up professionally & probate registered.

Similarly, I cant see why you couldnt leave assets in trust for sons lifetime, to be disbursed on sons death, to grandkids.
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Thank you Tamborine, I have plenty of good solid advice now.
When in trust does not entail third party (solicitor etc) intervention.
Question Author
I have an appointment next Thursday (26th) with a financial advisor, I will let you all know how I get on. Thank you

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