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UK Inheritance Tax

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QRM
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UK Inheritance Tax

Postby QRM » Sat, 22 Nov 2014 3:19 pm

Now that most of our parents are getting on a bit I was just wondering what people personal expereices are with IHT, all the google result says the same old thing, try and get the parents to give you their asset 7 years before they croak etc.

I know I should get in touch with a financial adviser, but no disrespect to the banki type here, but i know they are not in the job out of the kindness of their heart, they will try and flog me some product that gives them the best return.

Some say set up a trust but if that is such a great idea why doesn't every one do it, (too expensive and see banki comment above)

Just for example lets just say a friends mum has 1m pounds cash in various savings accounts what is stopping her taking it all out, go to bonhams and buy a million pound painting, roll it up and fly out to her kids and hand it over?

Sounds too simple am I missing something?

Primrose Hill
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Re: UK Inheritance Tax

Postby Primrose Hill » Sun, 23 Nov 2014 10:08 pm

Trusts these days have quite a high set up cost. Best thing is transferring out and live for the next 7years. In terms of property, if parents transferred it to you, your parents have to pay you rent .

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JR8
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Re: UK Inheritance Tax

Postby JR8 » Thu, 27 Nov 2014 1:41 pm

Primrose Hill wrote:Trusts these days have quite a high set up cost. Best thing is transferring out and live for the next 7years. In terms of property, if parents transferred it to you, your parents have to pay you rent .


Yes agreed.

I'd seek out an IFA. Their job would be to study the situation and suggest a range of options. Then you (and your savvier offspring) can go away and study the options and consider further. You should only be paying a fixed fee for their advice, and nothing commission based, or ongoing fee generating.

If the assets are substantial enough this might merit the use of offshore trusts and so on. A good IFA will have the contacts with a solicitor to facilitate this. I.e. the IFA should be like a financial GP who can make a cross-referral to any specialist that might be required.

The first step is finding an IFA that matches the task, i.e. someone geared to the client and their position: There's no point sending them to an IFA who is a mortgage and school fees specialist. I recently went through this with my own parents. Step one was... 'Do any of your friends (ie, similarly positioned people) have an IFA, with whom they have an established and satisfactory relationship with'?

It's better if it's someone local, so old folks can go and meet them, and sit down over a cup of tea and discuss matters. Certainly my folks don't like discussing money at all, so having a foundation of 'referral' and hence trust is important... as reaching the desired outcome necessitates a, frankly, pretty blunt and forensic analysis of the precise circumstances, including matters they might not have even considered (income, outgoings, proposed bequests, ongoing care expectations etc).

As I commented to my sister: 'This is my recommendation, and it is what is required. They will hate the ['intrusive/interrogatory'] process, but must remember that it is required in order for the best solutions to be arrived at'.
'Do it or do not do it: You will regret both' - Kierkegaard


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