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Where Taxpayers and Advisers Meet

Parents die within a year of each other

Sad and desperate
Posts:3
Joined:Thu Jul 05, 2018 9:12 pm
Parents die within a year of each other

Postby Sad and desperate » Thu Jul 05, 2018 9:16 pm

Please help me

My dad died late 2017
My mum is due to die within weeks
My dads will gave everything to my mum
The estate is worth over £1m, of which property is around £800k

Can I get a deed of variation to amend my dads will to make me the beneficiary and avoid a huge tax bill when my mum passes?.

AdamS93
Posts:268
Joined:Tue Sep 26, 2017 6:28 pm

Re: Parents die within a year of each other

Postby AdamS93 » Fri Jul 06, 2018 8:30 am

You could potentially. But as for saving IHT I doubt you will achieve your objective.

Without further information, I would guess (balance of probabilities) that using a deed of variation will increase the IHT due.

Sad and desperate
Posts:3
Joined:Thu Jul 05, 2018 9:12 pm

Re: Parents die within a year of each other

Postby Sad and desperate » Sat Jul 07, 2018 12:06 am

Thank you so much for your prompt reply.

I’m also interested to know if we changed the will does the £325k threshold apply to just the half of the house that is being given to us as opposed to the total value of the property?

Also there is the £100k extra allowance if a property is left to a descendant-would that also be added to each of my parents allowance or a combined total?

IanDarkwater
Posts:49
Joined:Fri Oct 31, 2008 10:55 am

Re: Parents die within a year of each other

Postby IanDarkwater » Sat Jul 07, 2018 10:55 am

Panic not. You don't give much information but the situation is probably as good as it can be.

On Mum's death, £900K in IHT allowance will be available on her estate as it passes to you - £325K allowance from each of Dad & Mum & £125K Residential Nil Rate Allowance from each of them as well.

Mum's estate will pay 40% IHT on the slice above £900K.

AdamS93
Posts:268
Joined:Tue Sep 26, 2017 6:28 pm

Re: Parents die within a year of each other

Postby AdamS93 » Sat Jul 07, 2018 11:12 am

Panic not. You don't give much information but the situation is probably as good as it can be.

On Mum's death, £900K in IHT allowance will be available on her estate as it passes to you - £325K allowance from each of Dad & Mum & £125K Residential Nil Rate Allowance from each of them as well.

Mum's estate will pay 40% IHT on the slice above £900K.
I agree this is the most likely scenario and why a deed of variation will be pointless.

However, there is a lack of information to say anything definitively.

someone
Posts:692
Joined:Mon Feb 13, 2017 10:09 am

Re: Parents die within a year of each other

Postby someone » Sat Jul 07, 2018 4:56 pm

However, there is a lack of information to say anything definitively.
Indeed. The elephant in the corner is whether mum and dad were married. Seems most likely but...

Sad and desperate
Posts:3
Joined:Thu Jul 05, 2018 9:12 pm

Re: Parents die within a year of each other

Postby Sad and desperate » Sat Jul 07, 2018 8:14 pm

Thank you again for your prompt and in depth replies, yes they were married. Is there any other info that would help?

AnthonyR
Posts:322
Joined:Wed Feb 08, 2017 2:33 pm

Re: Parents die within a year of each other

Postby AnthonyR » Tue Jul 10, 2018 12:39 pm

At this stage - if the timings you suggest are correct, there is not much more that can be done.

However, as the previous posters have stated, your parents should have a combined reliefs of £900,000 (as long as the estate doesn't exceed £2m) which means that in the grand scheme of things the IHT on a ~£1m estate shouldn't be excessive.
Anthony Rogers LLB CTA TEP
Fusion Partners LLP
anthony@fusionpartners.co.uk


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