Inheritance from Mother. How to avoid tax?

[NeilR]

My father (born in Austria) died in 1999 and left my mother (born in Ireland) his estate. in 2017, this now consists of

Family home where she lives - value of £950,000
Flat she rents out - £225,000
Cash - £150,000
Shares £100,000

my mother is in her late 60's, and me (born here in the UK) am now in my late 30's.
We have never done any tax planning but she is finally willing to discuss as her worry has always been putting into trust and me having control over her finances.

My question is, what is the best route forwards here. Is it too late to do a trust - I heard the law has changed.
If we do create a trust, what technical agreement can I put forward to keep her assured that she still has control over it. i.e. legal agreement outside of trust?

[maths]

What is the domicile status of you and your mother for UK tax purposes?

Where do you and your mother live?

[AnthonyR]

Maths has asked some important questions, but just picking up on a point I noticed that probably needs clarifying.

Your mother is concerned about using a trust and giving up control. She can of course be a trustee and retain control of a trust. She can't, however, retain any benefit, including income, from the assets put into trust.

The rules will change on 6 April for non-domiciled individuals mainly for CGT purposes, but if your mother has been resident in the UK more than 17 years she will be deemed domicile in the UK for IHT purposes. If she has not been resident in the UK for more than 17 years then there may be some options in relation to offshore assets, but UK property will still be subject to IHT unless transferred into trust (or other planning undertaken).

[NeilR]

Thanks for the responses..

My mum was born in Ireland but has lived in the UK for over 50 years. I was born in the UK and have lived here all my life

[NeilR]

sorry...

Just wanted to clarify the above..

When I say she has lived in the UK for over 50 years, I mean England. Same with me, I also live in England.

[AnthonyR]

That means for IHT purposes you are both deemed to be UK domiciled.

It is possible to still place assets into trust, however your mother will need to be excluded from benefiting from the trust and will need to survive 7 years to get the full IHT benefit. She can be a trustee to allow her to retain control and she should write a letter of wishes as settlor.

However, as always, I strongly advise against DIY trusts as they can be very complex, so make sure you seek professional advice.