Advice please re avoiding inheritance tax?

[Jimnibob]

Hi,

Can anyone offer any advice on how to avoid paying potential inheritance tax as the beneficiary of my parent's estate?

THE SITUATION

• There are three beneficiaries of the estate of my parents, my two brothers and me.

• My parents both instructed their solicitor to ensure that each half of their estate would be put into trusts on their death

• My mum passed away in 2015 and as instructed her half of the estate is now in trust

• My father still survives my mum and the estimated value of his estate is about £285,000. This is made up of his savings, ISA's, investment portfolio and his 50% of the estimated value of his home.

The value of dad's estate could easily reach the current inheritance tax threshold based on the historic performance of his investment portfolio and if the value of his property increases.

Is there anything we could advise dad to consider to avoid giving any money to the state?

Thanks

[bd6759]

Spend it

[AGoodman]

He shouldn't do anything for two reasons:

1. If he is leaving 50% of the house to his children then this value will be entirely covered by the residential nil rate band (both his and one transferred from your mother) and possibly some regular NRB transferred from your mother - he is not in the ballpark for IHT.
2. At these levels, he should not be giving anything anyway; he may need funds for spending (cruises are not cheap) and possibly care in later life (really not cheap).

[Jimnibob]

Thanks for the advice

[Jimnibob]

He shouldn't do anything for two reasons:

1. If he is leaving 50% of the house to his children then this value will be entirely covered by the residential nil rate band (both his and one transferred from your mother) and possibly some regular NRB transferred from your mother - he is not in the ballpark for IHT.
2. At these levels, he should not be giving anything anyway; he may need funds for spending (cruises are not cheap) and possibly care in later life (really not cheap).

Hi,

That is reassuring. My dad is 84 and currently in a care home and he is spending virtually none of his money and is unlikely to be able to. Does it make any difference regarding the 'residential nil rate band' as he is not living there and is currently renting his house to tenants?

Thanks

[Jimnibob]

He shouldn't do anything for two reasons:

1. If he is leaving 50% of the house to his children then this value will be entirely covered by the residential nil rate band (both his and one transferred from your mother) and possibly some regular NRB transferred from your mother - he is not in the ballpark for IHT.
2. At these levels, he should not be giving anything anyway; he may need funds for spending (cruises are not cheap) and possibly care in later life (really not cheap).

Hi,

That is reassuring. My dad is 84 and currently in a care home and he is spending virtually none of his money and is unlikely to be able to. Does it make any difference regarding the 'residential nil rate band' as he is not living there and is currently renting his house to tenants?

Thanks

I think I have just answered my own question with the below quote from the gov website;

Legislation will be introduced in Summer Finance Bill 2015 to provide for an additional main residence nil-rate band for an estate if the deceased’s interest in a residential property, which has been their residence at some point and is included in their estate, is left to one or more direct descendants on death.