Inheritance tax and gifting question..

{SAS}TB said:
Sorry about your father

I'm not expert but my father in law passed last year and my MIL a few years prior

He had taken legal advice around IHT and had made provisions (including names on deeds for the property and his will). The excruciating pain of dealing with various departments, HMRC and even the solicitors we appointed was horrific, especially at a time when my wife and sister were still very much grieving

Even with all that in place and appointing a specialist tax and inheritance solicitor they still ****** it up. My SIL said it did sound right, spoke to someone she knew, they challenged the solicitor who, basically said "oh, yes, you're right here's a bill for extra time checking and confirming we were wrong"

Obviously that didn't get paid

HMRC then shifted gear from slow to glacial

Long winded rant to get to saying if your mum doesn't have a will in place, please get one and power of attorney. Not easy conversations but will make things slightly less painful.in the future.

Hope it's not something you need to worry about for a long time :)
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Thanks.. thankfully they both have/had wills that were super simple. All to the surviving spouse then all to me.

I've just gotten LPA for my mum but Jesus Christ on a unicycle it was slow and opaque etc.. I still don't have the medical one as they decided I'd signed it in the wrong order despite the fact the finance one was done exactly the same at the same time.

Either way as I say I'm pretty convinced there'll be no requirement to deal with HMRC.
 
No issues at all.

Nothing to declare or worry about.

As other have said - technically a married couple have £1million before IHT becomes an issue. (£325k each plus £175,000 each under Inheritance Tax residence nil rate band)

Answering your other question - again - any gifts from your parents to you do count under the 7 year rule but since it's below the threshold it means nothing in reality.

Any gift (outside of the few small allowances) counts against IHT but in most cases won't actually mean anything in reality.
 
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gary996 said:
Im sure Raynor will move those goal posts so you get royally bent over
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I doubt it... It's not estates that are worth up circa 1 million that are the problem, especially with house prices these days.

It's the estates that are worth several millions and people find loop holes to avoid it.
It's not the 'middle class' that are the problem, the real 'potential lost tax revenue' lies with the horded millions and billions of the elites.

The fact is even if if an estate is valuable enough to break the threshold, you only pay IHT on the amount that's over the tax threshold after allowed deductibles, so it's really not a huge issue for the average family.
 
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booyaka said:
She already is

Pension pots will form part of your estate from 2027.... Massive change coming already.
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They will be referring to self invested private pensions, (SIPPs) and only the type that don't die with you.... for example you could take an annuity from your SIPP which is guarenteed income from your private pension until you die, then it dissapears, or rather the pension provider pockets whatever money is left over in the pot.

Not state pension or employers pension, and even that's not a given...they already climbed down on reducing the ISA allowance.
 
mattyfez said:
They will be referring to self invested private pensions, (SIPPs) and only the type that don't die with you.... for example you could take an annuity from your SIPP which is guarenteed income from your private pension until you die, then it dissapears, or rather the pension provider pockets whatever money is left over in the pot.

Not state pension or employers pension, and even that's not a given...they already climbed down on reducing the ISA allowance.
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A SIPP isn't a SIPP anymore if you bought an annuity with it and as annuities aren't inherited they're irrelevant to IHT changes. I'm sure they will include employer DC schemes in whatever decisions they make too. It wouldn't make any sense to include one but not the other as they are essentially the same thing.
 
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mattyfez said:
They will be referring to self invested private pensions, (SIPPs) and only the type that don't die with you.... for example you could take an annuity from your SIPP which is guarenteed income from your private pension until you die, then it dissapears, or rather the pension provider pockets whatever money is left over in the pot.

Not state pension or employers pension, and even that's not a given...they already climbed down on reducing the ISA allowance.
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Indeed. Some people find it confusing, but there's a fundamental difference between a defined benefit pension scheme vs one where you build up a pot of money. With defined benefit schemes there will probably be an entitlement to some form of widow's (or spouse or whatever) pension. But when they die, or if there is no one eligible to receive such a pension, then usually that's the end of it. If you have a pot of money invested in a pension scheme that you haven't used to buy an annuity (a defined benefit pension) then when you die that pot of money can be passed on.

Over the years defined benefit pensions have become more of an endangered species and most people with pensions have money invested in their own fund. It was probably inevitable that at some point the government would look at this and conclude that all these growing pension pots should not be exempt from IHT.
 
Yeah a sipp is like an isa but with even bigger tax advantages.

That's why a lot of people who invest in ETFs or whatever have both a SIPP and a S&S ISA as an investment vehicle, and split the money they pay in according to thier circumstances.
 
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