Inheritance tax - trusts. Giving to children- any tips

[Flyhigher]

So my elderly parents both own properties. About 6. They use them for a small rental income.

What's the best way to plan for less inheritance tax.

Putting things in trust? Or giving property over?

Should I create a trust for my child too?
Any savvy tax lawyers on MN? x

You need to speak with a good estate planning financial adviser, solicitor and will writer.

Questions that instantly spring to mind, albeit illogically. How do your parents own these properties? Are they through a limited company or are they owned personally? Do they have mortgages on them - what are the value of the properties minus the mortgages if they do. So many questions, so many variants that could determine the answer - also what is currently in your parents wills. Are you an only child - are there any other considerations - such as do they have cash to pay for care if needed. It is quite complex. That's before you start on whether there are life insurance plans and if they have estate planned with an IFA.

Your circumstances may be quite different to your parents, especially as you don't know exactly what is going to happen to them and whether it is all tied up in trusts to ensure you inherit in trusts and it can't be used for care.

Yes. So if it's in trusts it can't be used for care.
So that's how wealthy people get round selling their properties to pay for their care then?
So should everyone be doing that?

6 can't be a small rental income
Can they afford to loos that income by creating a Trust?
How old are they- deprivation of assets would come into play- regardless of a Trust

The properties aren't in the uk. Three properties only generate £1000 a month between them.
And quite a few months the tenants don't pay and leave fuel debts.

So it's not a great income.

So you can't invest in things to get income within a trust?

. Discretionary trusts
. There is another trust/plan you can get an income for life from but after 7 years the capital is outside your estate. Can't remember the name.

Hold on. So that is incredibly important information. If a property is not in UK then you will be looking at the legalities in that country.

Are your parents UK residents/citizens. Where are the properties? Where do they live?

You need proper financial advice from an IFA , not tips from strangers who do not have all the facts

If they are not in the U.K. then it's far more complicated, you need good advice from a tax expert in both countries

I will get advice. Just wondered if anyone knew anything about it.
Some properties are in the uk. And the others might be sold and money brought into the uk.

Does anyone have knowledge of discretionary trusts
Are they expensive to set up?

One is a uk citizen. They both were. But now only 1 is.

What is their domicile? Is it non-UK? See the tests for it.

Do they live in the UK for all or part of the year?

I'll be honest this will be above a lot of UK experts knowledge dependent on the country the other properties are in. I definitely would be waiting to speak to the right people. There is no reason to worry about discretionary trusts until you know it'll work in your situation.

This

The second one is a Discounted Gift Plan.