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Post death rearrangement to save IHT

(5 Posts)
Rangirl Mon 13-May-13 14:47:11

Looking for a bit of help re a friend.Her DB died suddenly,unmarried no children Will leaving all between 3 siblings Estate is about £750k so substantial IHT due She says she is looking to vary the Will to cut down the IHT .I am a solicitor but it is not my area My initial thoughts are that for a single person with no kids it is going to be quite difficult I know she will need to take specialist advice but it if any one has any helpful thoughts that would be great

Xenia Mon 13-May-13 15:24:49

Very hard if the brother has already died. Had he not yet died his life policies and pension could have been put in trust for his children or siblings (that is what I have done to reduce IHT but even so my children will be homeless when I die because of the 40% IHT which cannot be mitigated unless and until I give them my assets and survive 7 years).

It certainly would be worth seeing a solicitor about it though in case there is something that can be done. It may well be worth getting several valuations of any house as one (an accurate one) will go on to the probate documents for example.

The heirs might want to change the will so that all the assets go to the children of the beneficiaries not the beneficiaries. That may help later - eg if the other beneficiaries are likely to die in the next few years and yet another 40% handed over to benefits claimants, foreign wars and the other pointless things the state does with our money, then skipping a generation helps. They did this with Princess Diana's and varied it post death to pass to the next generation. However it will not save any of the IHT due now, just reduce the risk of more later and it may not be sensible to give your people a lot of money.

Rangirl Mon 13-May-13 17:32:38

Thanks Xenia that's very helpful

Domaby Mon 13-May-13 18:02:16

I agree with Xenia. The only other thing would be to give a portion of the estate to charity. If the deceased gave 10% of their estate to charity (including through a post-death variation) then the rate of IHT is reduced to 36%. Obviously this would mean the beneficiaries getting less as well, but at least its less IHT to pay.

Your friend should see a solicitor to make sure that all exemptions and reliefs are being used. For example on business assets.

Xenia Mon 13-May-13 21:58:19

(my post your people meant "young people")

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