my mother is reviewing her will

[123george321]

we would like some advice on the inheritance tax on my mothers will and estate.
Her estate has a value £800K and she wishes to leave this plit 6 ways equally between her 2 sons and their children ( 2 each). The childrens share would be held in trust until the age of 25.
1. Would this share of 200K each be exempt of inheritance tax, as it falls below the nil rate band.
2. Would a money gift say 60K (making a 260K total) distributed by my mother say 2 years before her departure remain exempt by the same principle?

[maths]

The answer to both questions is "No".

On death your mother's estate exceeds the nil rate band in total of £275,000.The excess is chargeable at 40%.

The fact that each gift under the will may itself be less than £275,000 is not relevant.

It may be that some part of your mother's estate of £800,000 is eligible for relief/exemption from iht (eg if she owns shares then BPR at 50%/100% may apply; APR (100%) if any farms etc are involved; QSR if your mother recently inherited some assets).

Only gifts made more than 7 years prior to death fall to be exempt.

[bob.fraser@towrylaw.]

As you have probably already calculated, the IHT on your mother's death will be about £210,000, so clearly she may wish to carry out some estate planning.
Depending on her age, health, and personal needs for capital and income, there are a number of steps that she could take. These would include a certain amount of life time gifts, use of business property relief (AIM shares and certain property shares), and discounted gift trusts.
She really needs professional advice.
Contaqct me if I can help.

Bob Fraser
Certified Financial Planner
07709430958