Hi,
I wanted to check if I understand these rules correctly. My Uncle is Married but permanently separated from his wife and they both live independently of each other in their own homes. They have consulted a solicitor regarding IHT planning and he has advised they should stay married due to their large IHT liability and set a contract in force to pass each others wealth direct to their children on their passing.
The uncle has savings of 500k and a house of 500k and this is likely to increase. The aunt has savings of 300k and a house of 500k also. However they believe that due to the new nil rate band residence allowance, once either of them dies, they have setup in the wills for the remaining spouse to pass the property and all savings over to the two grown up children free of IHT.
In my mind the new nil-rate band for residence can only be applied for one property, so if the aunt died first and the uncle passed the house and savings direct to the children, a significant sum would fall into a chargeable lifetime transfer tax as it would appear as the uncle would be gifting more than his nil rate band?
I thought I understood the old rules of IHT, but these new rules still appear to catch me out.
Has my uncle found a great iht strategy and reason for staying married?
Thanks
- Home
-
Tax News
- Budgets and Autumn Statements
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings & Investments, Pensions & Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations & Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practice and Methods
- Professionals in Practice & Industry
- General
- TaxationWeb
-
Tax Articles
- Budgets and Autumn Statements
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings and Investments, Pensions and Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations & Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practice & Methods
- Professionals in Practice & Industry
- General
- Tax Tips
-
Tax Forum
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings & Investments, Pensions & Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations and Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practices & Methods
- Professionals in Practice & Industry
- General
- Tax Jobs
- Get in Touch