Inheritance Tax

[Chris]

Any tips on avoiding excessive inheritance tax? Especially where a large valuable house is owned. I know the stock answer is 'see a solicitor', but I can't help feeling the solutions they suggest will be the most profitable for them and not necessarily for our best interest.

[Jan H]

My understanding is not to own your own house.  Gift it away well before death in trust for the family. (but you need a solicitor!) Or sell up (needs a solicitor) and spend the money. Downsize (needs a soilicitor) and spend the money.  Downsize (needs a solicitor) and gift the money to charity (more tax effective).  Gifts to trust cannot be recovered for your own benefit though.  Gifts are taken into account by the taxman over a 7 year rolling period so you have to watch your timing when you do this.  Gifts between husband/wife are exempt but this will not help the estate of the last person to die.  All you are doing is passing to someone else who has to worry about how to avoid. Seems to me you get stung for tax alive or dead.
Solicitors will benefit whatever way you proceed!!!

[Elder Rebel]

Do see a solicitor !!  Make sure that ownership of your house is split between Husband and wife.  Not joint ownership.  You can even gift some of the ownership to your children or grandchildren.  This keeps the value of each section down for inheritance tax.  It does not cost much to arrange.

For smaller properties it is still worthwhile to split the ownership of your house as this will usually be taken into account if or when Social Services do an assessment of cost you must pay for a Care Home place.  If ownership is split I am told they cannot properly value half of a house.