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(3 Posts)
stickyj Sun 02-Dec-12 08:52:35

Hi, just wondered if anyone could help. My lovely Dad sorted out lots of investment bond things all in one place and now he's passed away. The whole lot, worth around £42,000 has to come out now he's deid and be put into one bank account. I'm going to set one up. The four children will have a quarter each but I know nothing about how this will be taxed/inheritance tax etc.

Can we put some of it straight into ISA's for the 2 older children and have ISAs in our names for them? I am really angry about this money, my poor Dad had virtually nothing left when he died as he had to use all his money, and his house for care fees (that's another story)!

Any help would be really appreciated, thanks. We have no money whatsoever to get legal/financial advice.

LIZS Sun 02-Dec-12 09:00:56

There are 2 issues here. 42k would be within the IHT limit assuming he had no significant other assets, so nothing to pay on the capital itself. It would probably need to go to probate before it is passed on legally to the 4 of you and accumulate nominal interest in the meantime.

However you would be liable for income tax on any interest accumulated once you have the money above your personal allowance. Unless you "gift" the money to your children you cannot simply put it in ISA's in their names as that might be deemed an attempt to avoid paying income tax.

riksti Mon 03-Dec-12 08:01:13

If your children are under 18 you can't gift cash to them to earn interest in their hands as that is tax avoidance. If you don't want the cash or interest for yourself then one of the options is to set up a will trust where the cash goes into the trust and interest is distributed to your children with the cash going to them at a later date. Or give the cash to them straight from estate but it does mean access to a significant sum for a child.

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