Inheritance

[Gettingbysomehow]

I'm in line for an inheritance about the sum of a small house, under the inheritance tax limit. My parents live abroad in a tax haven.
I don't want the money I want my son to have it, not that I don't want it I just need to make sure his future is secure and his mortgage paid off, they will not however make him the beneficiary only me.
Does anyone foresee any problems re tax, bringing money into the country, transferring it to my son, etc. I don't want to be accused of money laundering. I will of course get advice but just need to be aware of the situation beforehand.

Once you have the money in this country you can transfer directly to your son without any tax being paid as long as you survive for 7 years. If you die within 7 years of the gift being made then it forms part of your estate and tax may be payable (details here https://www.gov.uk/inheritance-tax/gifts)

If your son uses the money as part of a deposit for a house then the mortgage provider may require a letter from you to say it is a gift with no reservations (i.e. you don't have any claim on his house)

As for transferring the money into this country you may need to take advice on that, particularly as it is coming from a tax haven

I'd get advice regarding possibly putting the money into trust for your son otherwise he will have access to it all the day he turns 18. That may not be in his best interests.

Research Deed of Variation.

As I understand, it’s a means of giving your inheritance to someone else with no inheritance tax implications as long as you do it within two years of the death of the person you inherited from. There is no rule about having to survive for at least 7 years, that is when you gift sums without a Deed.

He's 43 and has his own home. I wouldn't have trusted him with it at 18 at all but he's a family man now 😀

Thanks very much everyone.

If he uses it for a house he'll likely only need a copy of the will and a letter from you varying it to pass the money laundering checks. Not sure if this changes with different countries being involved.

🤣

On the basis that's he's 43, not 3, could you investigate whether your parents' country has the option of something like a deed of variation as pp suggested so it goes direct to him?
Or could your parent(s) rewrite their will(s)?

I thought the same if the will is subject to the law of England and Walls but presumably the OP would need to check if there is the same provision in the OP's parents' jurisdiction.

OP, this wouldn't require your parents to agree as it is a post-death change to their wil provided all beneficiaries agree.

If someone wants proper advice in this sort of thing where so they go? Who does one ask?

A tax accountant?
Some sort of lawyer? What sort?

Who does one pay to get advice in inheritance , gifting, tax etc

They refused unfortunately.

The important thing will be where your parents are ‘domiciled’ for inheritance tax purposes (this is more complicated than just where they live) and what jurisdiction their will is made in. If they are domiciled in England with an English will then you will be able to do the deed of variation within 2 years of death. If domiciled where they now live then whatever those rules are will apply. With a DOV there is no need to survive the 7 years for the gift to be excluded from your estate for IHT purposes. However is your own estate plus this gift enough to mean your estate will qualify for IHT? In not, it’s not worth the expense of the DOV, just gift it. If the money is ‘in a tax haven’ is it owned by them directly or in a trust? If in a trust, depending on the terms it may not pass under their will in any event and could be outside of IHT too.

We have used Deed of Variation to pass an inheritance directly to our DC. Very straightforward, and no tax implications.

Why don't you want the money yourself? Are you not worried about your own future? Your son will inherit from you presumably. Why do you not want to inherit from your own parents?

I’m not sure but it would be the OP who is doing the deed of variation on what they inherited so presumably would be based on the country they lived in. It has nothing to do with inheritance tax, it can only be done after someone has inherited money, after any tax implications in the country where the deceased lived.

I’m not an expert but I have spoken to a Solicitor about doing a deed of variation for some of the money I inherited from my mother - I’m still thinking about it but only have 6 more months to make up my mind!

I bought my house in the 80s when you could buy a large house for £20,000 and I've had a successful career, pension etc. I'm single, was a single mum. I'm not retired yet. I have another 5 years but I don't need the money. I invested wisely.
They have a much tougher time of it now. House prices are through the roof. Jobs are uncertain, everything costs a fortune.
I don't want his inheritance to go on my nursing home fees. I want him to have a good life now and a certain future.
He doesn't have any children, they can't have any so they will be on their own in their later years.

A discussion about whether the variation relates to the jurisdiction of the will or the personal jurisdiction of the initial 'recipient' - every day offers learning. It looks like it touches on IHT implications.

trustsdiscussionforum.co.uk/t/deed-of-variation-foreign-estate-beneficiary-in-england/4957/7

Your parents may not want to leave it to your Ds, but depending on the law in the country they live in once they have passed away the Executor (you?) and you may be able to do a Deed of Variation. This enables a beneficiary to sign a Deed to say that they divert their inheritance, or a named sum from it, direct to a different beneficiary.

If you did that the ££ would never have been yours and could not be considered part of your estate should you in turn die within 7 years.