Best way to pass on wealth?

[JOHNRE]

Morning, would appreciate some advice or suggestions about how best to pass on wealth to our son, taking into account IHT, CGT etc etc. In addition to our main residence, we own an apartment which we bought in 2014 for £242K which is now worth £280K. It has always been in my wife's name. It has never been our residence although our son did live there from 2014-2016. It has been rented out since 2016 with my wife claiming the rental income.

We are keen to start passing on some of our wealth to our son and would appreciate some suggestions about the best ways to minimise IHT and/or CGT etc.

Many thanks

John

[maths]

Depends upon size of your and your wife's estates.

With two nil rate bands (650k) plus two residence nil rate bands (200k (minimum)) up to 850k can be left to son IHT free; also CGT free if left via wills.

[JOHNRE]

Thanks Maths, very helpful. If we assume that we will not die in the next 7 years, how should we pass on our wealth on to minimise tax?

John

[maths]

You should retain your main residence and pass it to son by will on the death of the surviving spouse. No CGT and IHT mitigated.

Re rental property gift to son asap. Survive 7 years and no IHT. Gift gives rise to a cgt charge. However, given the figures gain is 38k. Split between two spouses ie 19k each. Annual exempt amount is 11,300 each. Taxable gain per spouse 8k taxed at 18% and/or 28%.

Depending upon other assets in your estates each spouse can give 3k each per year IHT exempt (and their are other exemptions which may apply).