The 3 only ways to avoid Inheritance Tax | Bluebond Tax Planning
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- Опубліковано 19 кві 2020
- If you have any questions on inheritance tax please use the comments section below or visit our website at www.bluebond.co.uk
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The following is a brief overview of The 3 only ways to avoid Inheritance Tax but the video obviously has more detail as to the reasons why the steps are important
Three main ways to avoid inheritance tax
There are three main ways to avoid inheritance tax and all inheritance tax planning falls under these three main areas.
The first is using your allowances and exemptions for inheritance tax.
1. Using the Nil rate band of £325,000
2. The residential Nil rate band of £175,000.
3. You can give away £3000 pounds per year.
4. You can utilise the small gifts allowance
The second main way is making gifts from your estate to avoid Inheritance tax
1. You can make a direct gift of an unlimited amount, which is classified as a potentially exempt transfer or PET.
2. You can make gifts to trust, which are classed as chargeable lifetime transfers. You need to be careful because there are different types of trusts, which are suitable for different needs. The video explains points you need to take care of.
The third way is to buy exempt assets form inheritance tax
The video explains what these are and how they work.
The main exemption is Business Property relief and we explain how this works for Inheritance tax
There are also other mechanisms which avoid inheritance tax which are also explained in full including the risks they carry.
Join our free Saturday webinar to learn how to solve your inheritance tax problem: www.bluebond.co.uk/webinar-pa...
Watch More: Top 10 Free Ways to Avoid Inheritance Tax • Top 10 free ways to av...
#InheritanceTaxPlanning #AvoidInheritanceTax
Thank you for the purposeful education and valuable earthly information.
Very good explanation- thank you.
Really interesting and explained everything in terms that were easy to understand, thank you.
Thank you very much for your kind comment
A really well explained video - thanks very much
Glad it was helpful!
Very kind of you to make these videos. Really beneficial to me as I've just started out and you have a very clear way of explaining this so Thank You it's really appreciated. There aren't many willing to help others in this area
Not a problem at all Adam - glad you find them useful
good info !
What a cracking video
Soon there will be NO incentive to go out and create wealth. I’ll just drink beer in the street with my benefit money!
Lesley - I feel your pain 😅
thank u
Brilliant
Thanks Michael - That's really appreciated
Hi and thanks for your videos. My sister and I inherited and sold our mother's house in Cyprus via a Cypriot solicitor and paid all taxes there. Do we need to declare it to the tax office? It is below the 325 threshold for each of us. Thanks.
Please do not regard this response as advice but simply how it work generically - It was your mothers estate. You say its below the threshold for each of us - the threshold is fopr the estate and not the reciepients and so ther emay be UK tax due. Use the Contact Us facility on our website to either get free advice by video or pay for a one hour meeting to get clear advice
Hi. What are the laws/rules around having assets and properties abroad? Would you have to pay taxes in the UK?
Hi Ashley - sorry your question is too vague to answer - send me a clear email from my website please and I will repond
I am the sole son of my widowed mother. She set up her will about, which favours me outright, 18 months ago and her estate is currently calculated at approx. £1,250,000. I have been living in the family house for 20 years and for the last 10 have been her sole carer. Apart from the £325,000 and £175,000 (RNRB) allowances are there any other allowances taken in consideration that the family home has been my main and only residence, or would I have to sell up to pay any taxes. The house was bought in 1968. Thanking you in anticipation for your reply.
It is possible for your mother to gift you half the house. Provided she lived 7 years that gift would fall out of her estate and so there would be not IHT to pay. You need to prove you pay half the bills and so a joint account which you put the same money into would be sensible. Provding you continue to live there this would not be regarded as a gift with reservation of benifit and you do not have to pay any rent as it would also be regarded as your main residence. There may be an issue if you have not always lived there so consult a lawyer. Please note this is not advice as i do not know enough about your circumstances please consult a suitable lawyer.
Are the new 10 year non dom rules to be applied retrospectively? As in, if we leave now, will the 10 year rule apply anyway?
They start from April 2025 so yes if you leave this year they will not apply to you
Hi, I am about to sell a house to help my son to buy a house in the area where he works. If I sell the house, give the proceeds to him as a deed of gift (processed by a solicitor), and if I survive for 7 years after that deed is made, does that mean those proceeds will not be taxed? Also, as I have a daughter as well, in uni now, can I make the deed of gift to split the proceeds to half to her and half to him, and in private ask her to give us her half back so we can live on it, as she doesn't need the money yet? And if 3 years later, I sell another house and make the deed of gift to my son and daughter again, will there still be clawbacks if the total amount of the proceeds of both houses is under £500,000, and I lived on for 7+ years after the second deed is made? Thank you for your advice!
This is too coplex to explain on UA-cam - email us using the facility on our website please
Great content, If my mum opens a joint account with myself and say a year later she Dies, if there is £100000 in this joint account can I still Access this as my name is also on the account.
Not if it was your Mum's money to start with, if you have siblings etc you could end up in jail
Thanks for the video. To follow on from the above (joint account question) If you put money into a joint account with a child (say £10000 a year). Would that deposited 7 years before you die be exempt IHT please?
Do you have tax planning advice service？
Hi - Yes we have been helping UK clients with Inheritance tax problems for over 20 years. Please visit our website to join a free webinar or book a meeting
How should outright gifts of cash be recorded?
I would simply keep a copy of the bank staement to show the transfer with your Wills. If it is a sizable sum maybe also a signed document between the parties and witnessed to state its a gift and not a loan
HI, thanks but not 100% clear. The Nil rate of £325K . Does this mean if parent dies leaving example £1.2M each child (4 children) inheriting can get £325K tax free , or is it limited at £325K split 4 ways (4 children)?
Hi Jamie - IHT is payable on the value of an estate BEFORE distributions can be made so how it is split is not relevant (unless the assets are being passed to an exempt benificary eg charity) Therefore if a single or divorced person dies leaving £1.2 million There will be an allowance of £325K and so the IHT laibility will be around £350,000 assuming no other exemptions or allowances such a the residential nil rate band or a Nil rate band passed unclaimed by a previously deceased spouse. If in doubt use the calculator on our website - www.bluebond.co.uk/resources/iht-calculator
Hope that helps
@@Inheritancetaxadvice thanks for quick response, just confused as I see comments like per person. The person being the deceased.
@@jamiecoates9891 Please use the email conatct on our website and I will respond in full
What about discretionary trusts?
They are a gift into trusts ( and so covered by that part in the video) and so fall under the the 7 year rule
@@Inheritancetaxadvice Ok but what about discretionary trusts with multiple beneficiaries. So let's say I have a family trust with ~20M in assets, with say 4 beneficiaries (mum dad and 2 kids). One of the beneficiaries (Mum or dad) dies, what then ? What if the trust was established a couple of decades ago as part of a family estate planning regime ... ?
@@YTGhostCensorshipCanSuckMe Sorry but this is too complex an answer to deal with on this platform - please book a free meeting on our website to discuss the issues
They are a type of gift but its a gift into trust instead of directly to a person
My mother gave me £50000 in 2014, she died December 2020, do I pay 40% on that figure?
It depends if she is the second spouse to die and what her will says as well. It seems she died within 7 years of you reviewing the gift. If she has made not other gifts she has an allowance of £3000 per year unused x 2 = £6000 which is exempt. The rest falls back into her estate and is potentially taxable depending on the value of her estate on death. Make sure you get experienced advice on how to deal with probate properly and the calculation should all be done at that point. Call me if you need a quick chat
As a retired tax inspector the only 2 ways to avoid IHT is ...spend it...or give it away and live 7 years after the gift.....nothing else I repeat nothing else is certain.I know.
Oh that it was that simple - a lot of differnt scenarios to consider about how you give it away and still maintain your lifestyle
@@Inheritancetaxadvice Oh it's that simple....but getting old folk to part with substantial sums of money and spend it or give to kids is difficult they seem to think they will live forever or they'll take it with them to the next life .I often used to grab £ 450k to £1.7m in IHT which if they had started to spend their assets on world cruises,new cars or given it to their kids as gifts (7yrs) in writing etc we (HMRC) would have only taken a few thousand so it's a mental thing!! But remember our motto '' if we don't get it the first time around we'll get it the next time!" we know all the tricks...all of them!! .....spend spend giveaway live 7 years.Best advice.
It is clear that the real billionaires see the wealthy as a threat to their control on government, and so tax terrorism ( and unnecessary need for home loans etc. ) are ways to reduce that threat from the wealthy
no mention os asset
trusts
Yes gifts into trust is one of the 3 ways mentions but it is a subdivision of gifts
@11:34 - "If you've just bought buy-to-let that would be considered an investment company and therefore inheritance tax wouldn't apply" dont u nean WOULD apply?
Sorry a slip of the tongue
Didn't you miss out contributions into one's own pension like a SIPP. If I die but have 500000 in my SIPP doesnt it fall outside my estate for inheritance tax purposes?
Hi Raj - Not really as approved pensions are all in trust and so form part of that section
@@Inheritancetaxadvice ah ok I understand , thanks for your response.
@@Inheritancetaxadvice a personal sipp is also in trust but is there a 7 year rule if one puts money in the sipp or is it automatically exempt from any iht on death.
@@rajibear77 Hi Raj no interestingly becaue you have to have pensionable earned income to place money into pensions there is no 7 year rule on investments into pensions and it would immediately be outside of your estate if you place money in pensions. If you have already been diagnosed with a life threating illness and die within two years there may be IHT issues
Great vid sir !
But, are you not missing another important way of avoiding IHT through Defined Contribution Private Pension Scheme. I thought these were exempt up to £1m and could be passed to children IHT free ?
HI AJ - Of course you are correct but as all approved pensions are not subject to IHT they are not strictly speaking a Way to avoid IHT becaue the money is not part of the Estate - also it is impossible to cover every nuance in every video otherwise it causes confusuoon and not clarity
@@Inheritancetaxadvice Is there also ways of avoiding IHT through Discretionary Trusts etc or is there always tax to pay at some stage in the process?
@@VincentRE79 Yes but discretionary trusts are copvered in the video as they are a gift away from your estate
did we really need the paper hiding the answears?
Hi John - as you will see this is on old video and I have improved my yoputube skills since the time this was produced. Howver the answers are uncovered as they are discussed which believe is valid as it focusses people attention on the point being made as oppossed to giving out all the information at the outset which may be confusing. If I was to put all the answers on screed at the outset the is no need for a video and so I am happy with the end result. - Of course you can disagree as we are all fully entitled to out opinion.
@@Inheritancetaxadvice no you make sence
@@paulhunter123 Thanks John - I appreaciate the understanding
@@Inheritancetaxadvice im trying to find way to avoid inheritance tax on our house. Do you know if it is as simple as my mum putting the house we own into mine and my sisters name to avoid this.? thanks
It astonish’s me how the UK is a “so-called” a free nation, but we’re dictated too on what we can and cannot do with our own money! To the point where we’re not even allowed to gift presents to our loved ones without getting in trouble by big brother-the state. These so-called “free nations” are more suited to be a dictatorship or the like-or maybe even worse!
Ok I get your perspective but as the saying goes the things that are certain are death and taxes - but if you have a IHT issue we cant solve the death problem but we can solve the tax problem. Attend one of our Saturday morning webinars to get a good idea what we do
Totally agree it's like living in a communist country! Work hard taxed on income, then get taxed on your savings, then taxed when trying to live off your savings from investments (no pension) then taxed again when gift your hard earned assets. The government job is to keep everyone poor and in debt so to keep them working.
Sod off, they'll just raise another tax instead
Can you give away your house to your children and then living the house and pay your children rent?
You can but unless your chiuldren permanently live with you it has serious negative tax consequences - watch this video - ua-cam.com/video/LOeetiAzZbk/v-deo.html
So basically its a bloody mine field
Good job we have an excellent mine sweeper😏