Inheritance tax - very confused(5 Posts)
I'd agree with financial advisor for investing, but for the nitty gritty of the IHT position I think you'd be better off with an accountant. Maybe you need both.
I agree regarding the need for professional legal advice. My father died a few years ago and we had to sell their family home to finance mums rest home care. The figures weren't quite as high as yours but nearly there. The
solicitors actually referred us to a very experienced financial advisor to enable us to invest the money more efficiently and thus fund her care for longer.
See an independent financial advisor - they can also assist with best way of investing the funds to get the most out of them whilst your dad is in care.
On an estate that size, you would be sensible to get professional advice, from an accountant specialising in inheritance. Anything I say is not professional advice, just some questions you need to ask when you talk to a professional.
Current rule is you only get the main residence allowance if you pass the house to a direct descendant - child, step-child or grandchild. And definitely ask your professional advisor as to whether you can preserve that allowance if you have sold the property - I'd be surprised if you can.
If he's got £600k aside from the house, I'd also be looking to ask whether it was worth deferring the sale, or gifting the house to you or the grandchildren - if he doesn't live 7 years it'll still be treated as part of the estate, but at least it will have gone to a descendent - although the government advice suggests that the extra residential allowance only applies if the transfer is in the Will, and not if it's a gift during the lifetime.
This is the official statement on IHT
And this is moneysavingexpert who usually gives sound advice
My Father is now in a care home and I am in the process of selling his house worth just over £1m. When he passes is inheritance tax not payable on first £325k AND main residence allowance of £125k even though he won’t actually own the house when he dies.
His will leaves everything bar some cash gifts to his 3 children. In total his overall estate is worth circa £1.6 m. He is self funding his care.
We are near to exchanging contracts and expect to complete in a few weeks.
I keep getting different answers and hope someone can help or point me in the right direction.
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