My grandparents want to give us their assets (more than £700.000) -what to do to avoid IHT??

Question

What to do to avoid IHT (Inheritance tax)- my parents want to give me and my brother more than £700.000 in assets and cash.

Answer 1

Assuming that your parents are domiciled and resident in the UK (which you would know if they were not) than all gifts to you will be potentailly excempt transfers.

If they gift you assets/cash and then survive for 7 years there will be no IHT. The IHT will be reduced on a sliding scale if they survive for between 3 and 7 years.

Transfers to all trusts are now chargeable lifetime transfers (from March 2006) and will give rise to an immediate charge of IHT at half the full death rate. If the donor then dies within 7 years there may be a further charge but as above taper relief may apply.

There is a yearly annual exception of £3k but this is minor compared to the amounts that you are talking about.

Also remember that depending on the asset that you are to receive there may be capital gains tax to pay (not on cash, primary residence, cars, wasting chattels and other small exemptions) this can be held over though gift relief. This means that your parents would not pay the tax but when you come to dispose of the asset you would pay capital gain tax on the whole gain starting from when your parents aquired the asset.

Answer 2

2 nice simple solutions for you:

1. They survive 7 years - the gifts then become exempt and no IHT (even if they don't, the longer they survive the less tax there will be due to 'taper relief').

2. If they still have alot of income there's a nice rule that lets them make annual gifts (of any value) to you - these must come from their income (not their capital) and there must be a pattern of giving (ie every year). They must be able to live on their remaining income.

Get yourself some advice from lawyer/accountant and ask about the 'normal expenditure from income' rule.

Answer 3

When they make the gift it will become a Potentially Exempt Transfer (PET). If the survive for seven years then the transfer becomes fully exempt and no IHT is payable on it.

It may be possible for some of the money to come out of their estates immediately by using a trust but you would need specialist advice on this.

I assume this money is "spare" capital. If it includes their house and they remain living in it then that value would remain in their estate as a Gift With Reservation. Also if they deliberately deprive themselves of assets and then need nursing care they would have to fund it themselves.

Answer 4

I'm going back to my uni days here, but there's a thing called 'gift intervitae' (I think thats what it is). Basically they can start giving it to you now, satggered over (i think) 7 years. You should really talk to an accountant. (Sorry I've gived up my days of being a financial advisor - it nearly took my soul)

Oh, and lucky you!

(by the way, only mainland Europeans seperate ooo's with a . you should use a , in Britain)

Answer 5

a million. God DOES explicitly let us know contained in the Bible a thanks to evade hell - contained in the total New testomony. specially, the first 4 books. 2. certain, God did provide certain regulations to the Israelites. He needed them to end sinning as they are His 'chosen people'. 3. each and every individual people is born into sin. each and every thing we do in this earth places us at risk of eternal punishment until eventually we are with Jesus. How a lot extra certain does God favor to be? My mind would not paintings correct, and that i nonetheless get His message loud and clean. 4. God does not shop rather anybody 'guessing'. in case you experience that way, you do not realize or favor to understand. you at the instantaneous are not in a attitude to 'attain out'. God will under no circumstances "stress" you to do something adversarial on your will. 5. certain. there is one sin it rather is unforgivable. examine Matthew 12:31. 6. certain I do. that's rather comprehensible. in spite of the indisputable fact that, people pick to have self belief that. in case you provide up, it really is what you get. at the same time as i became clinically determined with my psychological ailment numerous yrs in the past, I had that smarta*s body of ideas to boot. Now that i'm myself back, existence has extra which skill now than ever earlier. in case you want to stay a Christian existence, examine the total e book of James and shop on with IT fastidiously.

Answer 6

use it to plot against 'Brown and Blair'

All your grand parents money will go to help more benefit scroungers. GROWING EVERY DAY!!

See a tax advisor so not one penny goes to this shower of sh-t