What kind of advice do I need?

[Justkeeppedaling]

Tax evasion is illegal. Tax avoidance is not.

That being said - who do I need to talk to for advice on minimising the amount of inheritance tax we'll incur when DM dies?

She's not mega wealthy by any means, but we've worked out that combined pots of money, plus her owning a house that she rents out, push her into the inheritance tax bracket.

She's a widow, and everything is left to me and DSis in her will 50/50.

In the eventuality she needs to pay for a care home at some point, she can afford this from her pension without touching her assets.

Do we need an accountant, or some kind of financial planner/estate manage advice or who?

Thank you

There's usually at least two adverts in the free magazine that comes through the door every month. A search term of "estate planning near me" will turn something up for you.

"Estate planning"! Will try googling that, thanks.

If she's a widow she gets double the allowance so she needs a pretty substantial estate to attract it. She can give away £3000 a year without an inheritance tax implications.

@gogohm

If she's a widow she gets double the allowance so she needs a pretty substantial estate to attract it. She can give away £3000 a year without an inheritance tax implications.

This is wrong, or at least, simplistic. She doesn’t get double the allowance. She gets her own allowance plus any unused allowance from her DH. so if her DH used up his allowance by passing some of his money to the children, then she’ll get only her allowance.

Basically you need financial advice from an expert eg your bank or a financial adviser.

In the eventuality she needs to pay for a care home at some point, she can afford this from her pension without touching her assets

Are you sure? Care homes are north of £1,000 a week in most areas, sometimes £1,500 or more. She really has a pension of that much?

Were any of the assets bought before her dh died? If so his iht allowance should be taken into account.

We've done ours via a solicitor as what SHE needs is a carefully written will.

@SonicBroom

In the eventuality she needs to pay for a care home at some point, she can afford this from her pension without touching her assets

Are you sure? Care homes are north of £1,000 a week in most areas, sometimes £1,500 or more. She really has a pension of that much?

She was an NHS consultant, so could cover most of it from her pension, and she gets a pension from my father (who died 10 years ago), plus income a rental property.

You can never tell, but if she does ever need a care home, it won't be for long. She's rapidly approaching 90, lives alone, drives, and has an active social life. No history of dementia etc in the family. She's more likely to die from medical reasons than linger in a home because of mental decline.

@mdh2020

Basically you need financial advice from an expert eg your bank or a financial adviser.

This is what I'm asking - who is best to give advice.

I think I'll start with a solicitor, as some have suggested. I thought maybe accountant, but wasn't sure.

So, Parents had house, savings etc in joint names, plus personal pension pots, ISAs etc.
When DF died, everything went to DM.

So is my new understanding from here right - DM also gets all of DF's inheritance tax allowance when leaving asserts to me and DSis?

Which may mean no IT payable - she's no millionaire!

This is what DM did. Gave away large sums (hundreds of thousands) over 7 years ago. Kept enough for herself to see her out and pay for care as needed.

Inheritance tax is £325,000 per person. Plus another £325,000 for husband. The house is another £175,000 if applicable (double this if there was a husband).

If mum had died within the 7 years the money given away would have been taken into account, but on the anniversary of the gifts the sum was tapered down.

So basically the advice our accountant gave my mum was to live for over 7 years

You can give away a maximum amount annually plus specific gifts such as for wedding which are exempt from 7 year rule.

So is my new understanding from here right - DM also gets all of DF's inheritance tax allowance when leaving asserts to me and DSis?

Yes this is what happened with us

Thank you everyone.

Sorry - I wrote more that that.

Some good advice here - it's much appreciated

Thank you

@SonicBroom

So is my new understanding from here right - DM also gets all of DF's inheritance tax allowance when leaving asserts to me and DSis?

Yes this is what happened with us

The law was changed a few years ago so that any unused portion of a person’s IHT allowance could be added to that of their spouse.

That’s not quite the same as saying “DM also gets all of DH’s IHT allowance”. If the first person to die left some of their money to their children, for example, then they’d have used up some or all of the allowance and it wouldn’t be available to the spouse.

Previously, people used to set up discretionary trusts to achieve the same object - an amount equivalent to the IHT allowance into the trust, with spouse as one of the beneficiaries, with a lesser amount therefor going to the spouse in their own name, so lessening the future IHT.

OP If your DM is a self funder, she may be able to get the non-means tested Attendance Allowance to help with care home fees.

DF died about 10/12 years ago and didn't leave anything directly to me and DSis. All their assets were in joint names so became DM's, and that's what was in his will. I imagine most people's wills are similar.

OP If your DM is a self funder, she may be able to get the non-means tested Attendance Allowance to help with care home fees

She's not about to go into a care home unless something catastrophic and unexpected happens. She's fit, hale and hearty at the moment though a bit deaf, and not likely to need help with care home fees. I doubt we'd need to eat in to her assets too much to afford care.

She's also very "tight" with her money, and doesnt spend anything like all of her total income each month so between that and the fact that her three properties are currently increasing in value on an almost daily basis, like property everywhere atm, the "problem" is getting worse!

I fully understand this is a "problem" DSis and I are very lucky to have btw, but we would like to be able to pass as much as we can to our own adult children - we are both in our 60s, with DCs just starting out on the property ladder.

She can also give as much as she likes in regular gifts as long as it's from income and not from savings.

For example, if she has an income of £100k per year and low expenses, she might want to give her children £1000 per month starting now. These regular gifts are not subject to inheritance tax (it's a little known rule and the giving of these regular gifts must not affect her lifestyle.)

If her