That just isn't true though, is it?
We only scraped under the £325k limit for the estate earlier this year and £275k of that was made up of the house value.
Inheritance..
- Thread starter J86
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That just isn't true though, is it?
We only scraped under the £325k limit for the estate earlier this year and £275k of that was made up of the house value.
im pretty sure thats wrong
Associate
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I inherited a library (books, not a building!) from my late grandfather, which was nice.
Expect that to get very messy when he dies if there is anything worth fighting over. For once I'd recomend getting a very good lawyer in the field to ensure that everything is as water tight as possible.
I inherited some money when my grandfather died and his estate was sold off, other than that nothing yet thankfully.
He has named them in the will as to not get anything. Cant see how they can fight it.
Famous last words!
My guess is for Inheritance Tax reasons? Be wary that unless her mother pays a full market rent for living there, then what she's done will make absolutely no difference for IHT purposes than if she still owned it.
I know. lol
Soldato
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That will likely cause some resentment towards your wife, won't she share with them?
I doubt money is worth her falling out with her sisters.
Soldato
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I'm very sure it's wrong.
The only way round it is to put assets into a trust or pass them on 7 years before you pass away.
It's practically impossible to inherit debt unless you've entered into some kind of unusual arrangement.
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Isn't it a thing in Japan to have 100 year loans and pass them on?
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To get around IHT, make use of PET, and/or be joint tenant on the deed. Then the house will be the property of the other tenant upon the death of the other, and/should be never the part of the estate thus outside the IHT.
I.e. when the husband die and the house goes to the wife as they are joint tenants. The crown can't touch it.
I am not sure exactly how that would apply between father and son but that is the principle of joint tenancy agreement, it even goes outside the will if one was made, speak to a lawyer if in doubt. The point is that there are lots of ways to avoid IHT, the people who moan about it at the ones never prepared for it.
I.e. when the husband die and the house goes to the wife as they are joint tenants. The crown can't touch it.
I am not sure exactly how that would apply between father and son but that is the principle of joint tenancy agreement, it even goes outside the will if one was made, speak to a lawyer if in doubt. The point is that there are lots of ways to avoid IHT, the people who moan about it at the ones never prepared for it.
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Soldato
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Well if there is, that would be an unusual arrangement in this country.
Besides, it don't think it works like that. The debt is attached to the house i.e. a mortgage. If they don't pay the debt they lose the house. It's much the same here only mortgage terms are typically much shorter.
Debts have to be paid from the estate before the beneficiaries of the will can inherit anything. If there's not money left after the debts have been paid then the estate is worthless but the debts are covered then they can't be passed on.
Soldato
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Assets passed on to a spouse aren't liable for IHT, joint tenant or otherwise.
It depends on when the arrangement was set up. There are ways to avoid IHT but they all have there pitfalls. In the father son situation you're much better putting the property into trust, which also means that the house can't be sold to pay for care. However this has to be done 7 years before death or it will be liable for IHT and it effectively mean you don't own your home any more.
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The house we inherited had a mortgage on it, albeit a small one (22k), with no protection/insurance policy to cover it in the event of the borrower's death (my father) as the policy had been cancelled literally a week after the mortgage was paid into my father's account. Prior to this the house was unencumbered.
Luckily (if you like) there was a car with a reasonable value and some premium bonds; we sold the lot and paid off the mortgage (just about). We were advised that if that wasn't the case then either my brother and I would have to cover the mortgage in full i.e. one lump sum (so basically taking out a lot of credit between us, we don't have much in savings being only 25 and 23 respectively) or handing the whole house (£275k) to the lender for them to see for **** all and then pass the difference on to us.
Looking at how much lenders sell houses on for (reclaim what's our's, anything else above that is not our problem) I wouldn't be surprised if they let the house go for £100k less than it's worth.
Inheriting debt is more than possible and the lenders are all too happy to 'take the problem away' from you.
Soldato
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No it's not. Just because it's was financially beneficial for you to pay the mortgage doesn't mean you inherited a debt. The esate had an outstanding debt that needed to be cleared before the rest of the assets could be released. You could have walked away and you wouldn't have been held accountable for any of the money owed.
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