Wills and IHT

[ThingOne]

DH and I are about to re-do our wills after moving house, stopping at two chidren, etc.

I am 41 and he is 43. Two pre-school children. We don't have squillions but have equity in two properties, both of which are mortgaged. We own roughly 45% of the value.

I reckon we're too young and too "poor" (not that we are) to start IHT planning now and that this is something we should revisit when we are older, given there will no doubt be many tax changes over the years. I realise if we were seriously wealthy, had a business or complicated affairs we should plan now but that is not the case. DH does have some shares (but not loads), life insurance and a good pension which has been made over to me since I was but a child (ok, 24 or 25).

Obviously I will be taking professional advice but I like to have thought these things through before getting advice from those whose end aim is to sell me stuff .

I am going bleary eyed at the HMRC website and have not taken a word in.

You have 2 properties. if you die, your children will do alright, even if they do have to pay 40% on everything over 300k. I really don't see what the big deal is.

You also won't find much advice about "Inheritance tax planning" on hmrc website, unless by tax planning you mean increasing your life insurance policies to cover it?

tbh there isn't much you can do to reduce IHT nowadays - the only sensible thing to do before was to set up a trust so that when one spouse died the survivor could retain the benefit of the assets whilst still using the deceased's 0% allowance, but the chancellor has now allowed transference of a spouse's nil rate band so you don't even need to do that anymore so if you both die, your kids will get £640 tax free.
On thing you should ensure you do is set up a trust , with guardians and a trustee so that in case both of you do die together your kids are lokked after as you would wish.

There is actually a lot you can do to reduce your IHT exposure and the younger you plan the more you can do. Very basic IHT plannning would make sure you use up one nil rate band on the first death.

I would make an appointment with a good tax advisor as from my experience they will save you a very good deal more than they cost.

Oh dear - three completely different opinions . I agree our children will be OK but I don't want to be blase about sorting affairs out.
BTW we are sadly NOT in the paying £6k tax a month bracket, just old enough to have been able to buy a flat when we were young.

I agree with Prufrock

Swedes you area behind the times

Inheritance Tax (IHT) - Transfer between spouses and civil partners of unused IHT nil rate band

Sorry, yes you are right. Red Gordon has made it unnecessary to utilise one nil rate band on the first death with his new proposal. Is it already in place or is it from the next tax year? He did this because utilising one nil rate band on the first death is available in any case, using the most basic of IHT planning.

I think it was Malcolm Rifkind who said that IHT was a tax paid by people who don't trust their children. It's very true.

Thank you. This link is what DH and I thought only I had failed to find something clear, reliable and putting it in words of one syllable. I had begun to think we were hallucinating about the whole thing.

Hulababy's dh is a wills solicitor and did our wills at a very reasonable rate. I think you get a Mumsnet discount too! Try contacting Hulababy is you're interested.

Hi thingone I am a wills and IHT planning solicitor and offer a discount to mumsnetters..........if you are in the midlands.

MP