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.

[bombardier]

Several tips- 1st has been mentioned- Own your house as tenants in common
Second- Take professionl advice about a suitable trust. With these one can immediately protect about 50% of your "above limit" capital. The remainder is free of IHT after 7years.
You can also give your children reasonable amounts each year "out of earnings" Keep a record of what is given and when just in case you are then asked. Obviously you cannot give away more than you actually earn.

[Elder Rebel]

While I sympathise with Jan H's aversion to solicitors, they can be effective in avoiding unnecessary tax.  If you go to your local Age Uk, they have a list of solicitors preparing wills etc at low rates.  Usually around £100--200 depending on the complexity of your wishes. 
Better a couple of hundred to a solicitor than thousands to the Tax Man, even if your not around to hand over the money.!!!

[avalonmpk]

First and formost keep Labour out of office, then you must take legal advice, especially if you may need care in later years. Be careful about giving it away as you could be taxed on the benefit  in kind if living in a property that you have given away. One question where are all the retired solicitors who could easily enlighten us on the finer points?

[annasearchnews]

Probably selling up your property before hand would be a good idea and distributing the funds that way.

If you need to sell it in a hurry there are always options such as fast house sales or a sale and rent back option.. they are only for emergencies but at least you can access the funds quickly.