Postby Yiannis17 » Mon Aug 20, 2018 2:01 pm
Afternoon,
If I may back track on this one to Mr A Goodman's reply of 05/04/2018 at 10.12am.
Point 2 states that should the transferor not survive the seven years, then the full amount gifted and retained will become chargeable. Just to summarise, elderly husband and wife transfer say 500k of their main residence valued at 2.5m to their sons who still reside with them, so no gift with a reservation assuming they pay the bills etc. Is this point stating here that should death happen within seven years then the 500k and 2.0m wil be laible to IHT? I can't see that.
When the transfer of 500k is done could a Flexible Life Interest Trust not be set up whereby on the first death the balance of say half of the 2m will be transferred free of IHT. It is only when the second spouse dies that the 2.0m home less the IHT amount of 650k is taxable. Plus the 500k less taper if seven years is not reached.
Is my understanding correct?
thank you.