Finance experts please

Jacksonn · 29 Jan 2016 at 20:36

Cash sum.

muon · 29 Jan 2016 at 21:01

You need a new accountant.

They should have said what cheesyboy said without having to do research.

dowie · 29 Jan 2016 at 21:48

muon said:
You need a new accountant.

They should have said what cheesyboy said without having to do research.

^^^this

your current guy is useless

muon · 30 Jan 2016 at 13:09

Inheritance tax thresholds are going up as well aren't they?

£500k per person in 2020?

£425k in 17/18
£450k in 18/19
£475k in 19/20
£500k in 20/21

SeatIbiza · 30 Jan 2016 at 13:22

Tax aside - don't dare pay any on it. It's a gift.

Who is your landlord and how many years are left on your lease? Your figure of below £30k sounds a hell of a lot to me.

I've done leasehold enfranchisement on my own property and I work in property (surveyor) and would be very surprised if it's anywhere near that amount...

Kemik · 30 Jan 2016 at 14:36

I would get an new Accountant if he doesn't know the answer to that straight away or without asking a few other minor questions... That's a pretty basic question.

coolsurfer · 30 Jan 2016 at 21:30

Kemik said:
I would get an new Accountant if he doesn't know the answer to that straight away or without asking a few other minor questions... That's a pretty basic question.

Ditto

PhilGQ · 31 Jan 2016 at 08:33

Accountants (ACA, CIMA) are about creating, verifying or projecting financial records. Tax Advisors (ATT or CTA) should know about IHT but then some of them specialise in indirect taxes like VAT so may not be on top of it.

Anyway, your Mum can give away £3K a year without issue, if she made no gift last year then it doubles to £6k. If she gives £6k now then another £3k on the 6th April it is up to 9k.

Also if she is married, (doesn't have to be to your Dad), she can pass a further £9k to spouse who can gift it to you in the same way. So that £18k exempt.

As long as gifts less than £325k have been given in last 7 years, this gift just used up some Nil Rate Band, so will never be taxable. The full value is just added back on the estate for the next seven years. The sliding scale people are talking about applied to the Tax, NOT the value of the gift so as the gift is within the £325k, it is zero taxed anyway. There is just less Nil Rate Band for the rest of your mothers estate.

I think the best way to think of it is in her estate whether its gifted or not. If she lives 7 more year from the gift then it drops out. You would also saving yourself from the borrowing cost and repayments of the money.

Merlin5 · 1 Feb 2016 at 23:07

Thanks all, a lot of info. But my mum wants to give me the full amount now, not 3K a year. I need the whole lot now, it needs to go into my account ready for the lease and conveyancing fees. As far as her dieng within the next 7 years, unfortunately it's very likely. So do I get her to make me a cheque for the full amount or not?

SeatIbiza said:
Tax aside - don't dare pay any on it. It's a gift.

Who is your landlord and how many years are left on your lease? Your figure of below £30k sounds a hell of a lot to me.

I've done leasehold enfranchisement on my own property and I work in property (surveyor) and would be very surprised if it's anywhere near that amount...

Well you should know that it gets very expensive below a certain length of lease remaining. Mine is 64 years. The online lease calculator was giving me £25K for the value of my flat with the extended lease (90 years added on). But I had the surveyor come over on friday to value the lease. She said the online calculator is always on the low side and not official representation of lease premiums. When I wrote to the freeholders last year they wanted £36K. Now I'm going the statutory route. But my surveyor thinks about £33K is what I might still expect to pay, which frankly ****** me off as it's not savo5ng me much and I was expecting to pay about £25K. I'll have her report by the end of the week. Meanwhile I just paid her £800 for that.

Merlin5 · 1 Feb 2016 at 23:51

Moses said:
She should just give it to you now. That's the sensible thing to do. Then the clock starts ticking on the inheritance tax clock and your chances of minimising the inheritance tax cost increase.

Do you have siblings/other people who you'll share the inheritance with when she dies? If the estate's over the threshold, you might want to consider what'd happen if she dies in eg. a year, and how the portioning up of the estate will be affected by you being given this money now... but that's not to do with saving money, that's just to do with what the parties involved want to do re: fairness... which sounds awfully callous, but it's just being realistic.

I'll get her to make me the cheque then. Yes, I have two brothers who'll share. I honestly have no idea though what the estate is worth and if it's over the threshold.

Kemik · 2 Feb 2016 at 09:06

Merlin5 said:
I'll get her to make me the cheque then. Yes, I have two brothers who'll share. I honestly have no idea though what the estate is worth and if it's over the threshold.

You must be able to take a guess? If you even think it is close then you really need to speak to a proper inheritance solicitor or accountant rather than us. I wouldn't be comfortable giving out that kind of advice on here, which you will trust, and I'm a Chartered Tax Advisor...

Delvis · 2 Feb 2016 at 09:20

I still find it ridiculous you can't give you money to whomever you want without the stuff being taxed again.

cheesyboy · 2 Feb 2016 at 09:34

Delvis said:
I still find it ridiculous you can't give you money to whomever you want without the stuff being taxed again.

You can, though. Anyone can.

It's just that, upon death, you no longer really need the cash (can't take it with you), so the state takes back a little of it to put back into the societal pool from which you drew it.

And the 7-year taper means that those knowing they no longer need the cash can't unload to avoid the redistribution.

Raymond Lin · 2 Feb 2016 at 09:35

It's call Taper Relief.

Delvis · 2 Feb 2016 at 09:45

cheesyboy said:
You can, though. Anyone can.

It's just that, upon death, you no longer really need the cash (can't take it with you), so the state takes back a little of it to put back into the societal pool from which you drew it.

And the 7-year taper means that those knowing they no longer need the cash can't unload to avoid the redistribution.

It's more the inheritance tax I have a gripe with more than anything.

cheesyboy · 2 Feb 2016 at 09:49

Delvis said:
It's more the inheritance tax I have a gripe with more than anything.

That's what I was talking about - it's not like you need it when you're dead.

Diagro · 2 Feb 2016 at 09:55

cheesyboy said:
That's what I was talking about - it's not like you need it when you're dead.

And?

Why should the gov nick some of it then? What gives them the right?

It should be passed down to the family.

Raymond Lin · 2 Feb 2016 at 09:58

Delvis said:
It's more the inheritance tax I have a gripe with more than anything.

Good accountant, and good financial planning. I guess it's a big reason why people like Warren Buffett and Bill Gates plan to give away most of their fortune (into their own charity that they control) before they die.

cheesyboy · 2 Feb 2016 at 09:59

Diagro said:
And?

Why should the gov nick some of it then? What gives them the right?

It should be passed down to the family.

It's a tax like any other - what gives them the right to tax earnings, or house purchases, or shoes?

Frankly, I'm happier them taxing dead people than those who are still alive - I don't see why anyone (other than those speaking from a position of personal gain) would prefer it to be the other way around.

Kemik · 2 Feb 2016 at 09:59

Delvis said:
I still find it ridiculous you can't give you money to whomever you want without the stuff being taxed again.

That's a different discussion. To be fair, they are upping the limit so only a very small amount of people will fall within it. It doesn't account for much of the annual tax intake at all.