Question:
I have been told it can be done if, a company is set up or if the person gives the property to the loved one before the person dies, although this has to be done 7 years in advance of death.
Answers:
How much are we talking about?
Are you prepared to take a risk?
Invest in business assets which are exempt (100% relief) so that they are inherited tax free. See an accountant, or even (if you must) a good IFA.
Dint die for seven years
dont think its possible ring for advice but they got you all ways hope you get it sorted so so so unfair rather give it away first personally
There are basically two ways to avoid inheritance tax and they both involve reducing the value of your estate to the level of the nil rate band or lower. This amount is currently £300,000.
The first way is to leave money to charity. Charitable donations are not counted as part of the estate for IHT purposes. The problem here is that the amount you leave to friends and family is restricted to the £300,000 figure.
The second way is to give the money away whilst you are alive and not die for seven years. The problem with this method is that you may not be able to afford to do without the money (or the asset such as your house) while you are still living.
All the clever schemes involving trusts, etc are designed to create a disposal of your assets for IHT purposes but still allow you the use of them or the income from them. And this is exactly what all the tax avoidance legislation is trying to combat.
I think the best way is to downsize, or you could, depending upon your age sell the lot and move into sheltered accomodation. As long as you can afford to pay the rent. That`s what we intend to do, then divide the money between the grandchildren. The kids won`t need it, as they`re going to get their nan`s money when she leaves it. We`re `missing out` a generation, because the grandchildren will need it more than our kids.
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