Question on LPA/property/tax…
Discussion
Theoretically speaking, asking for a friend etc etc
Assuming my friend has LPA over a single parent's finance and my friend sells their house while the parent is still alive meaning that money goes into their estate.
Does that mean you lose the extra tax free sum of having the property in the estate when they die (£500k vs £325k)? If my friends parent's will left the property to him?
I think that's how my friend described it
ta
I will pass on any advice to my 'friend'
Assuming my friend has LPA over a single parent's finance and my friend sells their house while the parent is still alive meaning that money goes into their estate.
Does that mean you lose the extra tax free sum of having the property in the estate when they die (£500k vs £325k)? If my friends parent's will left the property to him?
I think that's how my friend described it
ta
I will pass on any advice to my 'friend'
Interesting /good question but I suspect the answer is no because there is now no longer a property just sale proceeds but having said that I just googled and this came up from Age UK. The second paragraph is possibly relevant but the third seems apt !
If you leave your property to your children or your grandchildren (including adopted, foster or step-children), you may gain an additional tax-free allowance of £125,000. This amount will increase by £25,000 every April until it reaches £175,000 in April 2020. Any unused part of this amount can be passed on to a surviving partner.
This additional exemption will also be available where someone who has died sold their home or downsized on or after 8 July 2015.
The rules are complicated and you should seek professional advice.
If you leave your property to your children or your grandchildren (including adopted, foster or step-children), you may gain an additional tax-free allowance of £125,000. This amount will increase by £25,000 every April until it reaches £175,000 in April 2020. Any unused part of this amount can be passed on to a surviving partner.
This additional exemption will also be available where someone who has died sold their home or downsized on or after 8 July 2015.
The rules are complicated and you should seek professional advice.
Lots of information about the downsizing allowance for your friend to read here:
https://www.gov.uk/guidance/how-downsizing-selling...
It's also worth bearing in mind that any unused RNRB can in certain circumstances be transferred to a surviving spouse, so the estate of your friend's parent might benefit from that.
Given the complexities of IHT, I'd recommend that your friend seeks professional advice. It'd be very easy to get it wrong otherwise.
https://www.gov.uk/guidance/how-downsizing-selling...
It's also worth bearing in mind that any unused RNRB can in certain circumstances be transferred to a surviving spouse, so the estate of your friend's parent might benefit from that.
Given the complexities of IHT, I'd recommend that your friend seeks professional advice. It'd be very easy to get it wrong otherwise.
I'm battling with this issue at the moment.
The first quote I had from my MIL's solicitor was around £450ph but she also needs a junior helping her, so another £150ph, all plus VAT !!
My situation is this:
I have lasting POA over my in-laws.
They sold their family house in 2012 for about £950k.
Downsized to a retirement property near us for £550k.
In 2016 they both moved into a fantastic but v expensive Nursing home as FIL had v poor health (both in their 90s).
We kept the downsized house for 2 years in case any issue with the Nursing home.
In the meantime FIL passed away in the Nursing home in 2017.
Finally sold downsized house in 2018 for £630k.
MIL still with us in Nursing home aged 98 but fading.
So as POA I'm just trying to pre-emptively work potential IHT matters out in advance.
I want to do as much as I can before getting the solicitors involved !
The first quote I had from my MIL's solicitor was around £450ph but she also needs a junior helping her, so another £150ph, all plus VAT !!
My situation is this:
I have lasting POA over my in-laws.
They sold their family house in 2012 for about £950k.
Downsized to a retirement property near us for £550k.
In 2016 they both moved into a fantastic but v expensive Nursing home as FIL had v poor health (both in their 90s).
We kept the downsized house for 2 years in case any issue with the Nursing home.
In the meantime FIL passed away in the Nursing home in 2017.
Finally sold downsized house in 2018 for £630k.
MIL still with us in Nursing home aged 98 but fading.
So as POA I'm just trying to pre-emptively work potential IHT matters out in advance.
I want to do as much as I can before getting the solicitors involved !
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