Inheritance Tax, a Little Help?

[KevjustKev]

Hope I've pull this in the right section

As my parents are now getting on a bit it's not going to be too long before they go. If they were to pop off tomorrow I won't have anywhere to live as the taxes will be too high for me to afford.

Any ideas?

Thanks 

Edited July 26, 2021 by tallthinkev

[Rll1288]

Are you living with them at the moment?

[Gordy]

you probably need to be a bit more specific on what taxes etc and why you cant afford anywhere

[Fadeingstar]

I am assumeing that you are refering to inhertiance tax on their property?

 

Edited July 26, 2021 by Fadeingstar

[KevjustKev]

2 hours ago, Rll1288 said:

Are you living with them at the moment?

No, but live in a place they own 

 

46 minutes ago, Fadeingstar said:

I am assumeing that you are refering to inhertiance tax on their property?

 

That's right

[KevinFlynn]

Sell what you inherit, pay what needs to be paid, rebuild somewhere else.

 

We'd really need more specifics...

[Chorlton]

Having completed probate myself when the last of my parents passed away after a bit of reading up it was for me straight forward enough. As everyone’s position is different a starting place would be the governments website on inheritance tax. I would not give anyone advice on this as I am not trained nor an expert.
 

https://www.gov.uk/inheritance-tax

[Geovest]

This is a very complex tax and to even to give any basic advice/information requires a lot more detail of what they own for instance. Best to pay someone for detailed recommendations as it could potentially save you a lot of money or cost you a lot if you get the wrong advice. Some basic info here:  https://www.moneysavingexpert.com/family/inheritance-tax-planning-iht/

Also don't forget that you could make use of gifts. Your parents could gift you the property you stay in now (or any amount of money). You will have to pay stamp duty. If they live another 7 years there is no tax payable. If they die before 7 years, inheritance tax is reduced on a sliding scale between 0 and 7 years.

[dicker]

All I will say is that paying for advice is money extremely well spent.....

Best

Dicker

[badar]

Always consult a good lawyer beforehand.

Theres a whole lot of options like gifting, establishing a trust that holds the property etc. Only the lawyer can tell you whats best for your unique circumstance.

[Pete]

Inheritance tax can and will hit a lot of people due to the explosive increases in property especially in London and the South East. This tax was originally established to extract some cash from the very wealthy and not the ordinary folks. Unfortunately the middle sector will be hit whilst the upper echelons find ways of avoiding paying.

As others have said, getting sound advice is recommended but there are lots of commission based advisors only too ready to sell you a solution that sounds great but earns them fat fees. Take your time to do some research before signing anything.

My knowledge is very limited but your parents could transfer their house to you as a gift and if 1 parent survives by 7 years then no tax is due. If 1 parent dies before the 7 year period then I think the surviving spouse receives their share with no tax liability. Needs careful checking as far as valuations and any stamp duty is concerned.

I think the richer tax avoiders manage to transfer their properties in to Companies and set up directors that own all the shares.
So if your parents house was owned by ABC with you and your parents as directors then as directors disappear it would eventually mean as sole director you own the company hence the house but how you ever sell it is not something I know anything about. Also there are trusts and I cannot comment as I have never looked at them.

Seek professional tax advice BUT be warned that many, if not most, financial advisors see you as an income generator and many will give advice that earns them or their employer handsomely.

PS - make sure you get Powers of Attorney set up in advance of berievement and use a solicitor and not a DIY method.
When a person dies leaving behind an estate the government vultures are knocking on your door before you have cleared the plates at the wake !

[Gordy]

16 minutes ago, Pete said:

Inheritance tax can and will hit a lot of people due to the explosive increases in property especially in London and the South East. This tax was originally established to extract some cash from the very wealthy and not the ordinary folks. Unfortunately the middle sector will be hit whilst the upper echelons find ways of avoiding paying.

As others have said, getting sound advice is recommended but there are lots of commission based advisors only too ready to sell you a solution that sounds great but earns them fat fees. Take your time to do some research before signing anything.

My knowledge is very limited but your parents could transfer their house to you as a gift and if 1 parent survives by 7 years then no tax is due. If 1 parent dies before the 7 year period then I think the surviving spouse receives their share with no tax liability. Needs careful checking as far as valuations and any stamp duty is concerned.

I think the richer tax avoiders manage to transfer their properties in to Companies and set up directors that own all the shares.
So if your parents house was owned by ABC with you and your parents as directors then as directors disappear it would eventually mean as sole director you own the company hence the house but how you ever sell it is not something I know anything about. Also there are trusts and I cannot comment as I have never looked at them.

Seek professional tax advice BUT be warned that many, if not most, financial advisors see you as an income generator and many will give advice that earns them or their employer handsomely.

PS - make sure you get Powers of Attorney set up in advance of berievement and use a solicitor and not a DIY method.
When a person dies leaving behind an estate the government vultures are knocking on your door before you have cleared the plates at the wake !

Power of Attorney done directly through the Office of the Public Guardian is straight forward and only cost £82.00 per form so £164.00 in total for health and finance, solicitors will and do charge high rates to do the same job as you do yourself, they will still look to deal with the signatures and witnesses but you can do that yourself and even have someone you personally know be the certificate holder, the OPG have guidance docs online that run alongside the application form....