Inheritance tax and loopholes?

Borris is the guy to answer this, but let me get my books...brb


edit - need more details, as in value of the property (how much he paid for it and what its the value now) and how much cash.
 
i'd seek professional advice, i know my parents have as its very complicated, as it would be their worst fear if my brother or i and had to give anything we inheirited to the government, so they are preparing to avoid it as much as possible.
 
TBH I can't provide many details yet but....

1) Probably between 3 (that are currently known) and... lets say 10 properties possibly including flats, shops and houses.

2) They were purchased a long time ago, at least 5 anywhere up to 30 years ago...

They are all London addreses in Greater London (I think) which will suggest possible prices...

As I said the whole thing is based on murky details but the individual form whom it was inherited has had a fair number of properties for quite a while, whether they remain and what legal state they are in will become clear later.
 
If there's that much it sounds to me like a bit of "sharing the wealth" is in order then. What a shame Gordon and Tony will get their grubby paws on it before our hospitals and schools and anything else tax is "supposed" to go towards. Nevertheless, a professional's help is required. While this Government deliberately maintains the current ludicrous tax threshold despite the rise in house prices, everyone should do their best to keep what they're entitled to.

[edit] Actually that's slightly wrong. People should have the freedom to give what they wish to whom they wish without the Government benefitting due to the legalised theft which is the current inheritance tax threshold.
 
providing that the details are thin...

If the parents gives it away, the gift is a PET (7 years) and no tax is payable when the gift is made. If his parents dies within 7 years then the PET becomes a chargable transfer. The amount of taxx could be reduce by application of the annual excemption (£3000) for the teax year in which the gift was made and provided that his parents has not made any other lifetime gift in the immediate preceeding tax year the annual excemption of the previous is also avaliable. Total £6000 max taken off.

Possible Business property relief (BPR) may apply, the amount depends on the type of property being transferred

1 - reduction of 100% of the transferred is allowed for transfers of the following assets ( meaning there will be no IHT in respect to those assets) if it is either

a - a business or an interest in a business

b - a company shares that are nto listed on a recognised stock exchange

2 - 50% reduction of the value transferred is allowed for transfers of other assets that qualified for BPR, they are

a - Company shares that are listed on a recognised stock exchange

b - land, buildings, machinery or plant owned by the transferor personally but used for business purposes.

Time limit for BPR

i - Transferor's ownership

The asset in question must have neen owned by the transferor for at least 2 years at the time of the transfer or must be a replacement for relevant business property where th ecombined period of ownership is 2 years.

ii - Transferee's ownership

Where there is a lifetime transfer that is followed by the death of the transferor within 7 years, the relief given at the time of the lifetime transfer will be withdrawn (VOID) unless the transferee still owns the business property at the death of the transferor..
 
cleanbluesky said:
My friend is set to inherit some property and cash (mostly property) - is there any way around potential inheriatance tax?
Click to expand...

Is it an inheritance or a gift? there is a big difference.
If its an inheritance -ie someone has died and left them to him ,then the tax man will take what they are due from the estate of the dead person .ie nothing your friend can do

If its a gift,then theres a lot that can be done with professional help
 
phykell said:
If there's that much it sounds to me like a bit of "sharing the wealth" is in order then. What a shame Gordon and Tony will get their grubby paws on it before our hospitals and schools and anything else tax is "supposed" to go towards. Nevertheless, a professional's help is required. While this Government deliberately maintains the current ludicrous tax threshold despite the rise in house prices, everyone should do their best to keep what they're entitled to.

[edit] Actually that's slightly wrong. People should have the freedom to give what they wish to whom they wish without the Government benefitting due to the legalised theft which is the current inheritance tax threshold.
Click to expand...

:D

Did you post in the inheritance tax thread in GD recently? I can't remember but I doubt it, as you would have been vehemently opposed to my point of view on the matter, by the sounds of it.
 
dirtydog said:
:D

Did you post in the inheritance tax thread in GD recently? I can't remember but I doubt it, as you would have been vehemently opposed to my point of view on the matter, by the sounds of it.
Click to expand...
How about the redux version? ;)
 
cleanbluesky said:
I am not seeking legal advice from OcUK - I am satisfying my curiousity, but thanks for your concern
Click to expand...
http://news.bbc.co.uk/1/hi/business/4767308.stm

"Failure to claim tax credits and poor inheritance tax planning are amongst the main reasons for people paying too much, the group added. IFAP said that Britons waste £7.6 billion a year in unnecessary tax. David Elms, chief executive of IFAP, blamed public "apathy or confusion" for too much tax being paid."

Apparently, inheritance tax is a minefield and requires careful planning...
 
There was a programme on BBC2 along these lines last night. Set up a trust, offshore, and stick all the wonga in there.

Speak to an accountant.
 
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