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    Anyone know when the inheritance tax limit is being increased?

    Banned
    I was under the impression that its being raised under Cameron.

    I know it's £325,000 without paying anything at the moment.

    Any ideas?

    22 Comments

    Supermod

    Apparently it was shelved until 2015.

    Original Poster Banned

    magicjay1986

    Apparently it was shelved until 2015.



    Really? Am I right in thinking it was being raised to £1m?

    Supermod

    JonnyTwoToes

    Really? Am I right in thinking it was being raised to £1m?



    That was to be the proposal, yes.

    Original Poster Banned

    magicjay1986

    That was to be the proposal, yes.



    OK, another question. When I went to see my folks over christmas, my mum got quite upset over christmas about where their money will go when the die (yeah, great topic of conversation!). I reassured them as much as I could but she asked me a question I couldn't answer.

    I mentioned that they are able to transfer their tax inheritance tax limits to each other upon death (so £325,00 becomes £650,000 for the whole estate) without paying a penny, but my mum asked what if they die closely to each other without being able to get to a solicitor.

    I know it's not the best topic of conversation of christmas but they've worked damn hard for the money they have and they don't want to see the tax man get anymore of it I guess.

    So is the estate (and tax limit) instantly transferred to the remaining spouse upon death or do you have to request it?

    Supermod

    JonnyTwoToes

    OK, another question. When I went to see my folks over christmas, my mum … OK, another question. When I went to see my folks over christmas, my mum got quite upset over christmas about where their money will go when the die (yeah, great topic of conversation!). I reassured them as much as I could but she asked me a question I couldn't answer.I mentioned that they are able to transfer their tax inheritance tax limits to each other upon death (so £325,00 becomes £650,000 for the whole estate) without paying a penny, but my mum asked what if they die closely to each other without being able to get to a solicitor.I know it's not the best topic of conversation of christmas but they've worked damn hard for the money they have and they don't want to see the tax man get anymore of it I guess.So is the estate (and tax limit) instantly transferred to the remaining spouse upon death or do you have to request it?



    Have they thought about making gifts? All gifts made more than seven years before the donor dies are free of IHT. However, if you reserve any benefit from a gift – such as continuing to live in a house you have given away – then HMRC may apply "gift with reservation" rules to apply tax as if the transfer had never happened. The problem with gifts is that if under some circumstances they can eat away at your nil rate allowance.

    To answer your question (not considering whether gifts were made etc) then the nil rate allowance passes to the other once they inherit.
    Edited by: "magicjay1986" 29th Dec 2010

    Just a quick note my nan went into a private residential home and had to sell her house now the basic cost of the home is roughly £25,000 a year and thats not for extras.We have worked out that pays for about 8 years at the home .After that we dont know what we gonna do and the house would originally gone to her children in her inheritance instead there will be hardly anything left.

    Original Poster Banned

    magicjay1986

    Have they thought about making gifts? All gifts made more than seven … Have they thought about making gifts? All gifts made more than seven years before the donor dies are free of IHT. However, if you reserve any benefit from a gift – such as continuing to live in a house you have given away – then HM Revenue & Customs (HMRC) may apply "gift with reservation" rules to apply tax as if the transfer had never happened. The problem with gifts is that if under some circumstances they can eat away at your nil rate allowance. To answer your question (not considering whether gifts were made etc) then the nil rate allowance passes to the other once they inherit.



    I mentioned the gift option, but their estate will be above the current IT threshold regardless.
    As there is no IT to pay to spouses or civil partners, I'm guessing the nil rate allowance for the greater £650,000 is therefore instant?
    This is where it gets a little morbid! My mum asked what would happen if they had a crash and one died before the other (but only by minutes).

    Gee, this sounds like I'm planning something! X)


    Edited by: "JonnyTwoToes" 29th Dec 2010

    Original Poster Banned

    archer1204

    Just a quick note my nan went into a private residential home and had to … Just a quick note my nan went into a private residential home and had to sell her house now the basic cost of the home is roughly £25,000 a year and thats not for extras.We have worked out that pays for about 8 years at the home .After that we dont know what we gonna do and the house would originally gone to her children in her inheritance instead there will be hardly anything left.



    Yeah, she asked about this as well. Difficult one I guess.

    Supermod

    JonnyTwoToes

    ^^^^ Thanks for this - good info.And yes, I mentioned the gift option, … ^^^^ Thanks for this - good info.And yes, I mentioned the gift option, but their estate will be above the current IT threshold regardless.As there is no IT to pay to spouses or civil partners, I'm guessing the nil rate allowance for the greater £650,000 is therefore instant?This is where it gets a little morbid! My mum asked what would happen if they had a crash and one died before the other (but only by minutes).Gee, this sounds like I'm planning something! X)



    Have they thought about going to see someone to discuss tax planning for "later years"? It is so important and for the sake of a few hundred pounds it could eventually save thousands.

    The next step is looking into power of attorney enduring and lasting now thats a complete can of worms.We going through the system now.

    Original Poster Banned

    magicjay1986

    Have they thought about going to see someone to discuss tax planning for … Have they thought about going to see someone to discuss tax planning for "later years"? It is so important and for the sake of a few hundred pounds it could eventually save thousands.



    Funny you say that - I mentioned that to them but my dad is VERY stubborn. He's got a fair amount of cash in the bank as well as the other parts of their estate but he won't spend a penny on things he doesn't feel are 'justified'.

    Trying to tell my dad to do some tax planning is like asking a cat to stay away from the cream - pointless!

    They're 65 at the moment and dad will be drawing his company pension this year also.

    I guess I'm looking to give them good basic advice and let them do the rest. I can usually do this but they asked a couple of questions I couldn't answer.

    buy them an appt with an IFA - could save your family a fortune by the sounds of it...
    Edited by: "dt_matthews" 29th Dec 2010

    Supermod

    JonnyTwoToes

    Funny you say that - I mentioned that to them but my dad is VERY … Funny you say that - I mentioned that to them but my dad is VERY stubborn. He's got a fair amount of cash in the bank as well as the other parts of their estate but he won't spend a penny on things he doesn't feel are 'justified'.Trying to tell my dad to do some tax planning is like asking a cat to stay away from the cream - pointless!They're 65 at the moment and dad will be drawing his company pension this year also.I guess I'm looking to give them good basic advice and let them do the rest. I can usually do this but they asked a couple of questions I couldn't answer.



    Seriously, do EVERYTHING you can to get them tax planning advice. It will be worth it.

    Original Poster Banned

    dt_matthews

    buy them an appt with an IFA - could save your family a fortune by the … buy them an appt with an IFA - could save your family a fortune by the sounds of it...



    If only they'd go! But good advice though.

    Original Poster Banned

    magicjay1986

    Seriously, do EVERYTHING you can to get them tax planning advice. It will … Seriously, do EVERYTHING you can to get them tax planning advice. It will be worth it.



    Cheers, and thanks for your help - very much appreciated.
    Edited by: "JonnyTwoToes" 29th Dec 2010

    Banned

    see the bold type specifically

    Inheritance Tax

    Inheritance Tax (IHT) is chargeable on individual estates valued at £300,000 or more, at a rate of 40%. This tax is applicable to all beneficiaries including family and friends but it is not applicable to married couples or civil partners. There are further exemptions from the tax, see below for more details.

    This personal allowance will increase to £350,000 per individual beginning tax year 2010-2011. However from 9th October 2007 couples (those married or in civil partnerships) will be able to combine their allowances, in order to double their total tax allowance or ‘nil-rate band’.

    This means that if one spouse dies they are entitled to bequeath £300,000 to family and friends without paying tax. If the deceased does not use all of the allowance, then the remaining amount is transferred on to the surviving spouse’s allowance.

    There is no limit to the amount of wealth that can be transferred tax free from one spouse to the other, before or after death.

    For Example

    If a deceased spouse, Mr X leaves £100,000 in inheritance to his children, the amount is not taxable as it falls within his ‘nil-rate band’.

    The remaining £200,000 of the allowance is then transferred to the surviving spouse, Mrs X and becomes part of her IHT allowance, so her ‘nil-rate band’ will then be £500,000.

    If you are a widow or widower and your deceased spouse did not use the full amount of their ‘nil-rate band’ then you are eligible to combine this outstanding amount with your own allowance to increase your tax-free slice. It is possible to combine these personal allowances, regardless of when your spouse died, as long as the surviving partner is still alive. There is no need to apply for this transfer; it comes immediately into effect once the surviving spouse dies.

    For more information see; direct.gov.uk/en/…736
    Exemptions

    Inheritance Tax is not payable on wealth which is inherited by;

    • Spouses or civil partners
    • Registered UK charities
    • Some national institutions such as museums and universities
    • UK political parties

    It is important to bear in mind that when a person dies, gifts over the value of £250 which they have bequeathed in the seven years preceding their death will be factored in to their personal allowance. There are further exemptions to gifts received in the seven-year period including;

    • Wedding gifts
    • Maintenance allowances to ex- and current spouses, relatives and children under 18
    • Gifts to children under 18 and in full-time education

    For full details on exemptions from IHT visit: direct.gov.uk/en/…612


    If you chose to transfer wealth over the personal IHT threshold (£300,000) into a company or newly created trust, then there is an immediate inheritance tax of 20% payable on the excess. The threshold figure will also take into account any gifts made in the preceding seven years, under the same terms as the normal IHT.

    If you die within seven years of making a company or trust transfer and you paid 20% IHT, then the amount will be subject to the full 40% IHT rate. If you did not pay IHT on the initial transfer then the figure will be added into your estate to work out any IHT which may be due.

    For more information on transfers to trusts and companies, visit; direct.gov.uk/en/…335

    The Independent Newspaper has created a guide to paying less inheritance tax, see; business.timesonline.co.uk/tol…ece

    Original Poster Banned

    ^^^^^ Spot on! Answers my question perfectly!

    Thank you.

    Banned

    JonnyTwoToes

    ^^^^^ Spot on! Answers my question perfectly!Thank you.


    hit the LIKE icon then

    only kidding lol

    Supermod

    I love a happy ending.

    Banned

    I wish my parents were rich

    MJ is the man.

    Are those the new rules csi? I think they changed a little while ago so that you don't need to set up a trust fund anymore. Good news if so.

    Banned

    Benjimoron

    Are those the new rules csi? I think they changed a little while ago so … Are those the new rules csi? I think they changed a little while ago so that you don't need to set up a trust fund anymore. Good news if so.


    states 2010 on the website

    acs.org.uk/en/…cfm
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