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Rakhi Vasavada
Rakhi Vasavada, Financial Advisor
Category: Finance
Satisfied Customers: 4474
Experience:  Attorney and Financial Expert. Have specialization in Financial Laws.Practice experience of over 13 years
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My 92 year old father believes he needs to get his estate to

Customer Question

My 92 year old father believes he needs to get his estate to below £23,000.
It is currently around £200,000 and he wants to know if there is a legal way he can "give" it to his two main beneficiaries i.e. me - his son and the son of my late sister.
Thanks
Submitted: 1 year ago.
Category: Finance
Expert:  Rakhi Vasavada replied 1 year ago.
Dear Friend,

Hello and welcome. Thank you for providing an opportunity to assist you.

If you can please throw some more light on your quesiton. Are you looking at reducing inheritance taxes in future ?

If not, can you please let me know the exact purpose / reason as to why your father feels that he should reduce his estate during his lifetime ?

Request you to kindly revert back as this would help me better understand your question.

Warm Regards
Customer: replied 1 year ago.

I really do not know why he thinks he needs to do this... it may be something to do with his worrying about going into care in the future... but in truth I do not know why...

All I know is he has asked me to find out how he can do this

Thanks

Expert:  Rakhi Vasavada replied 1 year ago.
Dear *****,

Hello and welcome again. Thank you for your reply.

I believe you are from UK. Let me think over some options apart from inheritance issues and I shall revert back to you in few hours.

Warm Regards
Customer: replied 1 year ago.

Thanks...

T

Expert:  Rakhi Vasavada replied 1 year ago.
Dear *****,

You are welcome. Please await my reply.

Warm Regards
Expert:  Rakhi Vasavada replied 1 year ago.

Dear *****,

Good morning.. Thanks for giving me some time.

After examining several possibilities, the only reason that I can see for your father wanting to reduce his estate is to save his beneficiaries from Inheritance Tax. Every taxpayer is entitled to pass on up to £325,000 of assets without paying any inheritance tax (IHT). Any assets over this amount are subject to a steep 40pc IHT charge on death, meaning the intended recipients only get the remaining 60pc between them.

Having said this, there is a catch. The 7-year rule will apply. The original owner must live for 7 years after giving the gift. If they don’t their estate or the person who received it will have to pay Inheritance Tax on it.

So, in my opinion, this should be the only motive behind your father's wishing to give his Estate away.

Let me know if think there can be other possibilities.

I am sure this would help.

You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question.


Warm Regards,

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