Q. Question? My Gran is in a home.
My mum has power of attorney and is the executor.
I have been told an executor who is also a beneficiary of the will is allowed to take £3000 per year from the estate to help avoid paying inheritance tax when she finally dies?
This is the advice of a solicitor so I'm sure it is correct but would just like to know what this is called?

Thank you

A. Best Answer: The simple answer is that it is theft.

The complicated answer is that your mother has power of attorney, presumably to administer all the affairs of your gran - she will need to check that she has that power.

IHT rules allows an individual to gift £3000 per annum without any consequences. Any more than that and it is still counted as part of her estate for IHT purposes.

Your mother has to be very careful to show that she is acting in the best interests of your gran, otherwise she may be accused of theft. If she takes the money for her own use, then that is likely to be the result. It would be best for you to go back to the solicitor and decide to whom the money should be gifted.

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Q. Question? 'A' has £350k saved from earnings, savings, inheritance etc . He wants to give it (without effecting his normal income or expenditure) to 'B'.

Also 'A' lives for more than the 7 year rule - so that aspect is answered already.
Is any tax payable by 'B' and if so how much?

Thanks.
To Simon,
Thank you very much indeed for your most helpful answer. So am I correct in inferring that the extra detail in my email which you copied to your answer, is only relevant in the event of a death within the 7 years, hence your extra answers. Therefore am I safe to assume that if 'A' lives (for example) for 20 years after the gift, that the gift is entirely tax free, and therefore that anyone can gift ANY AMOUNT to any friend with no conditions attached?
As a lay person, I just want to make sure I understand you correctly, so the extra clarification would be very much appreciated. Thanks very much.

A. Best Answer: Interestingly your email asking me to answer this question gives a lot more detail than your actual question does. For the benefit of everyone else I'll repeat it:
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"I'm hoping to find out if it is true that for gifts to be IHT-free, they must be made out of income - as opposed to selling assets to fund them?

Also I heard they must be regular ? or at least the intention must be for them to be regular; and they must not reduce the donor's standard of living. Any idea how to get the guidelines on that."
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A can give B as much as he wants, and there is no tax for either party to pay at that time. If A dies within 7 years the gift (unless exempt, for which see later) will be treated as part of A's estate and will be subject to inheritance tax (IHT).

Some gifts may be exempt, or partially exempt, from being brought into consideration for IHT. Obviously these are only relevant if the giver dies within the 7 year period. These include:
1) An annual exemption of £3000 per year. IE the first £3000 per year gifted is free of IHT.

2) Small gifts of no more than £250 per person per year. But if more than £250 is given to any one person IHT is due on the whole of that gift.

3) Gifts for marriage, up to £5000 per parent or less for other friends or relatives.

4) Normal expenditure out of income. EG regular payments, made out of income (not savings), that do not affect the giver's usual standard of living. This would cover things like money given to help children at university etc. There are no guidelines as to whether a gift falls within this definition or not. It would be a question of fact in each case.

If A does not die then B will not have to pay any tax. If A dies the previous gifts get first use of A's IHT nil rate band (NRB), which is the amount (currently £325,000) that can be left before IHT is paid. If the gifts are less than the NRB no IHT is payable on them, and the actual estate gets the remainder of the NRB and is liable for any IHT due. But if the gift is more than the NRB IHT is due on the excess and the recipient is liable for that tax.

If A dies within 7 years but more than 3 years after the gift the tax due is reduced depending on how long A survived.

Edit:
Your are correct. Provided the giver lives for at least 7 years after the gift there is no tax at all. There is only a chance of having to pay tax if the giver dies within 7 years, and only then do the various exemptions have any relevance.

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Q. Question? I have been left a inheritance and reading the papers,they say that due to inflation, the interest that i earn after tax ,i will be loosing a large lump.
As i`m not a gambling type,would gold be a answer?
Property is dropping and has to be maintained/insured ect, so where to go?
I don`t want to spend it ,i don`t need anything

A. Best Answer: What is important is to invest into a diverse portfolio of funds that invest across the world and across all the major sectors, (fixed interest, property, UK Equities, global equities). It is never a good idea to put all you eggs in one basket. Studies have shown that circa 90% of returns come from a strategic asset allocation and the other 10% from market timing and individual stock selection.

First thing to do is work out your attitude to risk, whether you have a specific goal in mind and how long you want to invest for.

First investment vehicle you should consider is an ISA.

Unless you are a professional investor do not try and invest on your own or follow any advice on here. Seek professional guidance.

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Q. Question? Hi

My mother wants to transfer (gift) a property that is her main residence to me and my brother equally. The probate value of property is £400,000.

I want to know the implications for capital gains tax, stamp duty and Inheritance tax.

As it was her main residence, she will get Principal Private Residence, hence no CGT.

I want to pay my brother his share, so all the property will be owned by me which i will then rent it out, and will remortage on my name. what r implications for this disposal of half of the property for my brother?

thank you

A. Best Answer: Probate is obtained after someone dies.If your mother has already passed away she cannot gift the property to you.

If she has not passed away. I think you mean that the current value is £400K. For your CGT purposes you will be treated as acquiring an asset for £400K. That will be the base cost when you come to sell it.

You will be liable to pay tax on any rental income receive, less a deduction for the expenses you incur letting the property.

For the next 7 years the property will still be counted as part of your mother's estate for inheritance tax and social security purposes. If she moves into sheltered accommodation or into a nursing home, her contributions to the cost will be calculated on the basis that she has a £400K asset. If she dies, inheritance tax will be paid on the basis that she still owns the property.

You will also need to consider whether there is a lifetime gift tax when the transfer is made. Inheritance tax is paid immediately there is a transfer over a certain limit. I am sorry but I do not know that limit ff-had.. it has been a while since I needed to know the rules.

You really ought to seek professional advice in view of the amount of money involved here. What you spend on advice now will save a lot of grief at a later date.

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Q. Question? Death tax to be revised. 20k off every death on top of inheritance tax and dormant bank accounts, people complain that there isn;t a saving culture in the uk, perhaps if savings weren;t raided every other year people would bother
han that death tax is added onto inheritance tax, to be getting 325k, u would be looking at over 500k inheritance, also most houses in london sell above that price, london is where 10% of the UK live

A. Best Answer: because they're greedy rich people. It's how the world works sadly. If you earn sh!t loads and spend it... thats fine ... but if you don't earn much and save up for ages then you get punished!

*whip noise* STAY DOWN - PEASENT *whip noise*

:D x

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Q. Question? i remortgaged the house to help buy us another house and just before our retirement, downsized my own house to pay off part of our joint house. I spent remaining capital on doing up houses to rent out(my pension for retirement) ,jeep for renovation and retirement holiday.

I came back from holiday and found he was having an affair. He has now retired, left me with his part of the remaining mortgage and I have to sell my own house to pay it off. He now wants his share of our house. Because i innocently down sized and spent capital getting ready for retirement I cant give him money he wants.
He will come out of this with thousands and I have lost thousands. He cheated on me before 8 years ago and I feel he used me to get on housing ladder.
He lied to me about his ex wife, handed her his own house years ago and his new woman wont share as I did .I am devastated. I worked long hours to get our homes ready and this is my childrens inheritance. will the courts look at the whole picture, even if we are not married. We were together fo a decade.I have found so much evidence about his devious ways since we split up. He even lied about the death of his mother and her maiden name and fiddled his tax for years.
I could write a book about his lies. I am nearly 60 and I just want to end up with what is rightfully mine. I think the affair was going on while I was making the financial arrangement for our retirement.

A. Best Answer: Now you can understand what men have been going through for years by being divorced by gold diggers whose only intention was to screw as much money as they can from the man.

Welcome to the real world.

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Q. Question? Hello,

I live with my partner and her 2 children. This morning she got a letter off the council saying she owes £11,000,00 and it needs to be paid in 20 days.

Before we met she lived on her own in a different house where she looked after her 2 children and received housing benefit and council tax benefit for 12 months.

To cut a VERY long story short her dad transferred £17,000,00 into her bank account 2 years ago as in was inheritance from her grandmother then withdrew it the next day and put it down as a deposit on a house in Turkey (where he lives now).

So basically there saying they want all this money back she received then as she should of not got this because £17,000,00 was in her bank for 24 hours.

We have no money to pay this money back. And just don't know what to do.

Any help would be very much appreciated.

Rang the council and they said we need receipts for this £17,000,00 which we don't have and have to contact with her farther any more.

Regards,
This is from 2006-2007
Well it was with abbey national which she is no longer with. They dont want bank statements. They want reciept for they house basicly. Her mother died soon after so her farther took this money moved to Turkey and have not seen him since.
No, we are not claiming housing/council tax. I work very hard for my family. I have 2 jobs and pay £195 council tax a month and £600 rent. With no help.

A. Best Answer: Sorry I misread first time...so how did her dad withdraw it from her account?

Also receipts for what? What would a receipt prove? Do they need bank statements?

She received the inheritance (even though she didn't) a year after she stopped receiving benefits?

I was gonna say what everyone else said, contact Citzens Advice.

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Q. Question? I am looking into buying my grandmother's house, which she owns outright, as she is planning to move into a bungalow. I have been lead to believe that it is possible to construct a strict mortgage repayment agreement whereby my grandmother would act as the bank meaning I would have to pay interest on top of the repayments, but I was wondering if it would be possible to pay off the house in an ad hoc manner depending on how much money I could spare each month until the house valuation is met, with my grandmothers agreement of course. Also would my grandmother be the legal owner of the property up until the point when I make the final payment? I am assuming my grandmother would have to sell me the property at the current market value to avoid any inheritance tax complications, is that right?

I am not looking to rip off my grandmother, I am just wanting to know where we both stand legally in this situation.

A. Best Answer: This is an example of owner financing. Local laws in your state will govern how the ownership and financing rules go. In a typical mortgage, the buyer is the owner, but the lender has the right to reposses and foreclose if the terms of the loan are not adhered to.

In your case, you can negotiate with your grandmother all terms of the loan, the most important being: 1. interest rate, 2. term, 3. escrow for taxes and insurance, 4. early payment fees, if any. The interest rate usually depends on credit score, a good credit score should get a 4.5 - 5% rate of interest. Term is usually 15 or 30 years, mortgage company usually keeps the escrow, and there is generally no prepayment penalty.

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Q. Question? A friend of mine received a large monetary inheritance. He'd like to gift some of it to me. I'm wondering what the best way to go about this would be and at what point the gift would be subject to tax. My wife is also receiving child and work tax credits so I am curious if the gift would affect that in any way. Thanks for the info!

A. Best Answer: There is no limit to the value of gifts that can be given in the UK.

If the gift is cash there would be no tax to pay now. If the gift is property, then it is deemed to have been sold at market value and the giver would be liable for Capital Gains Tax (CGT) if it has increased in value since he first acquired it. However, if the acquisition was recent then there will be very little, if any, gain so there will be no CGT to pay.

Either way, it is possible that there could be an Inheritance Tax (IHT) liability. If the giver lives for at least 7 years then there is no IHT. If he dies within 7 years of the gift, then there could be IHT to pay if the gift, or the total of all gifts in that period, exceed the IHT nil rate band of £325,000. If this is the case then you (as the recipient) would be liable for IHT due on the gift. If the gifts are less than this band, the band available to the rest of the estate is reduced accordingly, but any IHT due will be paid out of the remaining estate not your gift.

Eligibility for child and working tax credits is based solely on regular income, not gifts or how much money you have in the bank. So this gift would not affect these tax credits.

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