Inheritance tax
Discussion
Hi all,
This weekend my mum and step-dad popped round to discuss inheritance tax (in light of my mum recently being diagnosed with a terminal illness).
Neither them nor I was 100% sure how this works.
Their estate is as follows;
1 main house worth £200k
4 rental properties worth £450k
Plus approx £50k cash in bank.
Total value approx £700k.
If/when my mum passes, half of the estate will be my step dads, with me and my brother getting my mums half (25% each).
Gov website says inheritance tax charged at 40% on estates over £325k. Is the estate as described above £350k or £700k e.g. Is it just her half that counts or all of it?
It's not something I really enjoyed talking about but I did say I would do some reading around the subject. Obviously they will be getting professional advice in due course.
Thanks in advance.
This weekend my mum and step-dad popped round to discuss inheritance tax (in light of my mum recently being diagnosed with a terminal illness).
Neither them nor I was 100% sure how this works.
Their estate is as follows;
1 main house worth £200k
4 rental properties worth £450k
Plus approx £50k cash in bank.
Total value approx £700k.
If/when my mum passes, half of the estate will be my step dads, with me and my brother getting my mums half (25% each).
Gov website says inheritance tax charged at 40% on estates over £325k. Is the estate as described above £350k or £700k e.g. Is it just her half that counts or all of it?
It's not something I really enjoyed talking about but I did say I would do some reading around the subject. Obviously they will be getting professional advice in due course.
Thanks in advance.
Sorry for your situation, I understand how stressful this time can be.
Given the value of assets and available allowances, with sensible structuring it is likely that your family will be able to avoid IHT altogether. How the assets are owned today, and how the owners will(s) are written will have an impact. Some basic IHT-savvy advice on wills (a decent high-street solicitor should be all you need) can help you and your family avoid the many pitfalls for the unwary.
This is a useful summary of how IHT works: http://www.telegraph.co.uk/tax/inheritance/does-ne...
Given the value of assets and available allowances, with sensible structuring it is likely that your family will be able to avoid IHT altogether. How the assets are owned today, and how the owners will(s) are written will have an impact. Some basic IHT-savvy advice on wills (a decent high-street solicitor should be all you need) can help you and your family avoid the many pitfalls for the unwary.
This is a useful summary of how IHT works: http://www.telegraph.co.uk/tax/inheritance/does-ne...
Edited by WindyCommon on Monday 18th December 12:33
JapanRed said:
Eric, yes they are. Is this a good thing or bad?
For IHT, good.Transfers of assets between spouses are IHT exempt. And the surviving spouse also inherits the deceased person's Nil Rate Band.
For those who are not married or who are not in a Civil Partnership, death can work out extremely costly.
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