Lexus Legal Advice...

[LowRed]

Need a Little Legal advice if there are any Lawyers or people in the know...

I live with my Great Uncle in our house, which he legally owns. Mortgage fully paid off.

He's in his mid 80's and to put it bluntly it would seem he does not have too long in this world.

The question I have for advice is - The house is left to myself. Valued roughly at £350,000. His savings could be upto £50,000

When the time comes I would like to sell up, and move house to another area close to us for about £180,000, and put the rest in a fixed ISA Account to secure me and the wife to be financially.

I have read about Inheritance Tax taking 40% off any Estate left to me.

Not to sound callous but how can I do what I plan to do without the Evil Tax Man robbing me blind????

Any Advice greatly appreciated for my Dilemma :)

Regards

LowRed

[Gord]

Put the house in your name before he passes away, if you going to be getting the house anyway.

[LowRed]

Put the house in your name before he passes away, if you going to be getting the house anyway.

Did cross my mind but he is a stubborn old bugger and would not go down that route for me

[Bazza]

Put the house in your name before he passes away, if you going to be getting the house anyway.

i think you have to do it about 5 years before they die !

[LowRed]

Put the house in your name before he passes away, if you going to be getting the house anyway.

i think you have to do it about 5 years before they die !

yeah i did read 7 myself, i don't intend to come across as a moneygrabber but there must be a way to secure the estate without such a big cut for the tax man :shutit: its shocking!!!

[Bazza]

yep its is 7 years with depreciating tax rate through the years

quick look at the tax site , and it seems you can recieve up to £315000 without being taxed and if you and your wife are joint beneficiary's its £600000

best check though

[LowRed]

yep its is 7 years with depreciating tax rate through the years

quick look at the tax site , and it seems you can recieve up to £315000 without being taxed and if you and your wife are joint beneficiary's its £600000

best check though

well thats what i read, but number 1 chances are the estate will be well over the £312,000 and 2 me and the lady are not married yet, the estate is left to just me

Poop Street and no Paddle spring to mind

[DJ Wozza]

Does the Tax rate of 40% only apply after the £300,000 or everything if the sum exceeds £300,000 ?

I'd suggest an independant finacial advisor that will guarantee a course of action in writing.

[LowRed]

Does the Tax rate of 40% only apply after the £300,000 or everything if the sum exceeds £300,000 ?

I'd suggest an independant finacial advisor that will guarantee a course of action in writing.

I believe its 40% of anything over the £312,000 bearing in mind the house could exceed that on its own. My fear is do they tax me on the house when I recieve it in my name. Am I affected when I plan to sell the house.

Potentially if the house is £350,000 and savings left are £50,000 I could be taxed 40% of 90 Grand!!!!

There must be a loophole to stop such a big tax :shutit:

[shake]

There must be a loophole to stop such a big tax :shutit:

only 2 i can think of... your uncle lives forever, or your name isnt in the will.

saddly as your uncle isnt really opting to help you there is not much that can be done.... best option would of been, he gifts the house to you, while living there he must pay rent (you need proof of this). after he passes the house isnt taxed as its yours. obviously this would only work if he went along with it.

[TigerFish]

Potentially if the house is £350,000 and savings left are £50,000 I could be taxed 40% of 90 Grand!!!!

The £50,000 savings will cover the £36,000 tax bill if you had to pay it straight up. I feel for ya buddy, must be really :tsktsk: to get £364,000 for nowt. Wish that kind of :tsktsk: would happen to me

[Geoffers]

Be very careful as you could end up with an even bigger fine if you find a loophole that isn't strictly legal but appears so.

They know all the angles. Unlawful disposal of Assets in this case.

[dipsetdeano]

Funny you should ask but i am studying this at the moment on my way to becoming a solicitor so here are a few points that may be of some use:

1. Under current tax rates the first £300,000 of his estate will be exempt from tax (nil rate band). This figure will increase in the next financial year i forget how much to but i can look it up if you like. Gordon Brown set down the nil rate bands for the next few years already and the rate that is in effect when your uncle dies will apply.

2. If you make a gift to a person in your lifetime then it is exempt from inheritance tax if you survive for 7 years after the gift.

3. Everyone can make gifts using their annual exemption of up to £3,000 each tax year which will not be subject to inheritance / capital gains tax. If you have not used up the previous years annual exemption then you can use this too - so the maximum gift would be £6,000 this year if last years was not used and £3,000 for each year thereafter.

4. You can also make a gift 'in contemplation of marriage' which can also be tax exempt - I forget how much of the top of my head.

He might want to consider setting up a trust which could help avoid some tax but i'm not going to go there as i will fry your brain and mine as its way 2 late on friday for trust talk.

A simple thing i would suggest is him using his annual exemption each year to reduce his estate and thereby avoid the tax man getting his hands on 40% of the estate above the nil rate band (currently £300,000).

Be careful if he decides to sell off some assets as the disposals may attract capital gains tax.

These are just a couple of things off the top of my head which i hope helps but I would def advise independent legal advice to see if there are any more exeptions you can make use of.

Wow and i thought this information would never be of any use to me!!!

Hope this helps, any queries let me know and i will do my best to clarify.

Deano

[Fargo]

Potentially if the house is £350,000 and savings left are £50,000 I could be taxed 40% of 90 Grand!!!!

The £50,000 savings will cover the £36,000 tax bill if you had to pay it straight up. I feel for ya buddy, must be really :tsktsk: to get £364,000 for nowt. Wish that kind of :tsktsk: would happen to me

man, why try to beat the system, your only put pressure on yourselves and the uncle if you try to force him.. just eat the 36k tax bill stop being greedy and be happy that you got 364k for your uncles life.

[LowRed]

Potentially if the house is £350,000 and savings left are £50,000 I could be taxed 40% of 90 Grand!!!!

The £50,000 savings will cover the £36,000 tax bill if you had to pay it straight up. I feel for ya buddy, must be really :tsktsk: to get £364,000 for nowt. Wish that kind of :tsktsk: would happen to me

man, why try to beat the system, your only put pressure on yourselves and the uncle if you try to force him.. just eat the 36k tax bill stop being greedy and be happy that you got 364k for your uncles life.

Thanks for the Sarcasm folks really helpful advice your giving to the above

The House is run between myself and Uncle, he pays the rates and I pay all the bills and costs of the house.

| have lived at the house all my life from Day 1, carrying out any maintenance and repairs to the house when needed.

The Savings if he has any will pay for the Tax but would be nicer saved for the future, I am not getting any money or the house for nowt, my Grandfather put his life into looking after the house and ensuring the security of myself.

Further its not about beating any system, and I don't intend to see 36k go to the Tax Man when its there to secure my financial future for the family I plan to have one day.

Yes it seems its all on a plate, but my family and myself have worked hard for it. Rant Over

Back on topic, it looks like if I get married this will increase the Estate to £624,000. Happy Days it seems as I'm in the wedding plans Process. Thanks to all that gave USEFUL Advice ;)

[TigerFish]

Potentially if the house is £350,000 and savings left are £50,000 I could be taxed 40% of 90 Grand!!!!

The £50,000 savings will cover the £36,000 tax bill if you had to pay it straight up. I feel for ya buddy, must be really :tsktsk: to get £364,000 for nowt. Wish that kind of :tsktsk: would happen to me

man, why try to beat the system, your only put pressure on yourselves and the uncle if you try to force him.. just eat the 36k tax bill stop being greedy and be happy that you got 364k for your uncles life.

Thanks for the Sarcasm folks really helpful advice your giving to the above

The House is run between myself and Uncle, he pays the rates and I pay all the bills and costs of the house.

| have lived at the house all my life from Day 1, carrying out any maintenance and repairs to the house when needed.

The Savings if he has any will pay for the Tax but would be nicer saved for the future, I am not getting any money or the house for nowt, my Grandfather put his life into looking after the house and ensuring the security of myself.

Further its not about beating any system, and I don't intend to see 36k go to the Tax Man when its there to secure my financial future for the family I plan to have one day.

Yes it seems its all on a plate, but my family and myself have worked hard for it. Rant Over

Back on topic, it looks like if I get married this will increase the Estate to £624,000. Happy Days it seems as I'm in the wedding plans Process. Thanks to all that gave USEFUL Advice ;)

Now you are off your soap box, it aint your house (it is owned by your uncle) and it aint your savings (it is your uncles). So you are getting plenty for nowt Grandad working for it or not, you still stand to gain a :tsktsk: load of equity and money which you didn't have to outlay in the first place. Paying the bills don't mean diddly, we all have to do that (including a mortgage) and don't get a third of a million for the privilage at the end off it. Be happy you are getting what you are getting, a lot of people will never get that kind of leg up in life. The tax is a small price to pay IMO :winky:

[Sagitar]

Back on topic, it looks like if I get married this will increase the Estate to £624,000. Happy Days it seems as I'm in the wedding plans Process. Thanks to all that gave USEFUL Advice ;)

Death duty will be paid on your great uncle's estate by whoever is appointed to execute his estate and is unaffected by who receives the money (unless he donates it to a charity) so whether you (as a beneficiary) are married or not will make no difference.

Who will receive the residue of the estate will depend upon what his will says - if he hasn't written a will then the laws of intestacy will apply - in that case, what you receive will depend upon what other living relatives there are - e.g. if he has a wife who is still alive, then she is likely to get the lot - if not then the estate will be shared equally among all the living relatives - your special relationship with your great uncle will not give you any priority. So make sure there is a will.

It could make a difference if your great uncle was married, since a trust could then be set up so that the total untaxed allowance would in effect be doubled, but that could mean that none of the estate would pass to you until both your great uncle and his wife had died.

A limited amount can be given away by your great uncle each year, in the form of a gift, without attracting death duty retrospectively, but the last time I looked it was only about K£3 per annum.

Advice (including mine!) given on a site like this one, without detailed knowledge of the circumstances, is pretty much worthless. There are various leaflets published by bodies like Age Concern and the Law Society that explain the situation, but they are quite complicated and the most sensible thing you can do, is consult a solicitor who specialises in will writing and who will advise on the best way to minimise death duty. At the very least, have a talk with someone at the Citizens Advice Bureau.

[LowRed]

I am only trying to get advice off people on this Forum, I'm aware I've been blessed with luck on the house and monies coming to me in the future. I don't need Jealous Rant Spam, just the advice thanks

The House btw Sagitar is left to me in his will and I am the only person left it all, he has no other Family and I plan to stay at the house as Main Resident for several years after his passing away.

Hope that helps for ADVICE

[Gord]

I am only trying to get advice off people on this Forum, I'm aware I've been blessed with luck on the house and monies coming to me in the future. I don't need Jealous Rant Spam, just the advice thanks

The House btw Sagitar is left to me in his will and I am the only person left it all, he has no other Family and I plan to stay at the house as Main Resident for several years after his passing away.

Hope that helps for ADVICE

The question I have for advice is - The house is left to myself. Valued roughly at £350,000. His savings could be upto £50,000

When the time comes I would like to sell up, and move house to another area close to us for about £180,000, and put the rest in a fixed ISA Account to secure me and the wife to be financially.

Change you mind ? if you now plan on staying then the house could be worth more than £350,000 in several years time.

[TigerFish]

I don't need Jealous Rant Spam, just the advice thanks

It isn't a jealous rant or spam so come back down from up your own :tsktsk: . If you don't want everyones advice then make sure you put the caveat in at the beginning that you don't want anyone to answer who thinks you have nowt to moan about.

My advice was to pay the tax bill and be happy. Just 'cos it aint what you want to hear, that's your problem. Life is too short to worry about losing a little wedge out of a big wedge

[Sagitar]

I am only trying to get advice off people on this Forum, I'm aware I've been blessed with luck on the house and monies coming to me in the future. I don't need Jealous Rant Spam, just the advice thanks

The House btw Sagitar is left to me in his will and I am the only person left it all, he has no other Family and I plan to stay at the house as Main Resident for several years after his passing away.

Hope that helps for ADVICE

Then I can see no way that the executor of your Great-Uncle's estate can avoid paying death duty on any sum that exceeds the death duty allowance.

Incidentally, I do not believe that you can put an unlimited capital sum into an ISA. The ISA limit is £7,200 per annum currently, of which not more than £3,600 can be deposited to a cash ISA.

[Fargo]

. I don't need Jealous Rant Spam,

no jealousy here im afraid, UNFORTUANTLY i was in the same boat when my dad died, would rather have my dad than the money, so quit your moaning, pay the duty and move on.

[TheDon]

could you not arrange to buy the house for a nominal fee from him? pay the duties off that, he can have a great time with the money and agree to pay you his savings as rent or something... so everything is done in life and not in death, and of sound body n mind? then pay off the morgage or what ever with the inheritance funds.

But i agree totaly with fargo.. your uncle has not passed yet, my dad died suddenly when i was 18 and i would give all i have to have him back. The time should be spent making his last time here the best. What ever you get after the tax man has been paid is more than you have now, and the only two certanties in life are death and taxes.

[DJ Wozza]

.... my dad died suddenly when i was 18

Same here mate. I had a few shaky years after that. My father passed away suddenly late one Friday night.

My son cut his first tooth during the day on Friday, my partner was so excited and wanted to visit him & my mum

that evening. I had just worked a 12 hour shift, and didn't fancy the trip as I was very tired, plus it was 2 long bus

rides each way.

I said "we'll go tomorrow"............. :crybaby:

The reason I share this personal information is because of something Chris said in the above post.

..............time should be spent making his last time here the best

That is so true mate, you never know when your time is up, and the resources are there to make it happen for him as well

Be gratefull for the time you have, as you will never ever get it back.

Given the time again, I would definately have caught 4 buses.......................

It really looks like you will get well over £300,000 worth of assets mate. Taxes have to be paid like it or not.....:tsktsk:

The only way I can see you paying less is if he sells the house to you for a less than market value price, & has

some form of legal contract regarding his low rent (covering your mortgage payment) or no rent tenancy until

time comes for him to say goodbye.

With all the best intentions from the members of LOC, realistically a proper independant financial advisor could cost a few quid,

but save you thousands anyway.

That is your best bet, and has been suggested on this thread more than once.

[LowRed]

.... my dad died suddenly when i was 18

Same here mate. I had a few shaky years after that. My father passed away suddenly late one Friday night.

My son cut his first tooth during the day on Friday, my partner was so excited and wanted to visit him & my mum

that evening. I had just worked a 12 hour shift, and didn't fancy the trip as I was very tired, plus it was 2 long bus

rides each way.

I said "we'll go tomorrow"............. :crybaby:

The reason I share this personal information is because of something Chris said in the above post.

..............time should be spent making his last time here the best

That is so true mate, you never know when your time is up, and the resources are there to make it happen for him as well

Be gratefull for the time you have, as you will never ever get it back.

Given the time again, I would definately have caught 4 buses.......................

It really looks like you will get well over £300,000 worth of assets mate. Taxes have to be paid like it or not.....:tsktsk:

The only way I can see you paying less is if he sells the house to you for a less than market value price, & has

some form of legal contract regarding his low rent (covering your mortgage payment) or no rent tenancy until

time comes for him to say goodbye.

With all the best intentions from the members of LOC, realistically a proper independant financial advisor could cost a few quid,

but save you thousands anyway.

That is your best bet, and has been suggested on this thread more than once.

Sound Advice, thank you. I will naturally make sure my Great Uncle will live his life as enjoyable as possible til the end, I have mainly just raised the issue to see what options will benefit me and my family for the future.

I will seek advice from a Financial Advisor to get it all sorted out, Thanks for all the advice chaps. Apologies for the Spam created on this Thread :)