My parents have assets of around 900K. Assuming an IHT allowance of 700K (350K for each of them), this will leave around 200K as open to IHT. I am an only child & hence will be the sole beneficiary of the estate.
My parents wish to minimise their IHT by reducing their TAXABLE inheritable estate by paying for our house extension (which they do NOT live in)/car/holidays, thereby bringing the overall value of their estate to below the IHT threshold.
Specifically, my parents propose to pay for our extension/car/holidays directly; i.e. not gift the money directly to myself, but rather pay for the items out of their own bank account, so no money can been seen to be gifted to myself. The assumption is that they are free to spend their own money however they wish, thereby reducing the IHT tax implications.
My question is whether this is a viable option?
Many thanks,
AndyB
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