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I just want to share with you a thought about IHT
we all like to think we leave something for our children when we pass
some of us would like to leave them a lot others want to leave them little
when your children are working and earning a living They too can play a part in your IHT planning
I offered my son the chance to insure my life and he paid the premium to cover the IHT bill which he will face
so let's say your IHT Bill is 500k
I apply for the life cover of £500.000 and the Insurance company give me the cover
I put the Insurance into a Trust beneficiary my son and he then has the cash to pay the IHT Bill
I take this tack on IHT its not really my problem its my son's problem so let him pay the premiums
Long term he can't lose as long as he pays the premium
so I leave it to him to choose
Pay a monthly premium and have the money to pay the tax
Or allow the family trust to pay the IHT in instalments and then when the tax is paid he can then have the income.
Learn Change and Adapt ?????
I really like the sound of that DL .
Life insurance seems such an easy way to resolve multiple succession issues in one hit and negates the need to do a lot of paperwork
It also gives them an active responsibility going forward
This is a total blind spot for me though
Are there any advantages / disadvantages of using that insurance to pay down mortgages to prevent them being sold rather than just paying the IHT bill?
After death how long do they give the kids to sell the portfolio if needs be to pay IHT
Do they give them an opportunity to take out a BTL mortgage to keep it going ?
Is it better to sell them to them now or gift it to them or put them on the deeds and what taxes do you pay ?
I want to gift lots of them to them and then live 7 years . Whats the best way to do that ?
They are all currently in joint names with wife as joint tenants
Jonathan Clarke. http://www.buytoletmk.com
IHT has to paid within six months or interest is due, it can be paid in instalments subject to interest on the outstanding balance,
Selling or gifting them to children will trigger CGT.
The ideal would be life cover for the mortgage amount and IHT.
I want to gift lots of them to them and then live 7 years . Whats the best way to do that ? - Keep breathing
You can give them property un encumbered with a 7 year rule for IHT
I asked my lenders what would happen to encumbered property if I passed they all said they would look at the situation and look at who wanted to take over the mortgages but have to be re written in there names
again given them insurance written in trust is helpful because there will be costs such as valuation fees arrangement fees ect
Until the mortgages are settled they can not own the property
If you have a Ltd Co this topic is much easier the company mortgages stay the same and you children would be come directors or share holds when you leave shares to them
Debt is a good thing for IHT its 100% claimed of the gross estate
This is why I have gone down the company route on death its much easier to deal with on the mortgage front but you still have the IHT issue
life insurance is the simple way of dealing with this issue but over the years it can be costly
But this is why I prefer the person it helps to pay the premium
as a side issue Pensions on the other hand are outside of your estate and can avoid most IHT
a powerful argument to use pensions for passing down wealth