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Gifting as a POA - Inheritance tax issues

MonCherie

New member
Jun 23, 2022
6
0
Okay, so this looks to be a very grey area.
My father-in-law ran his own business and in Feb was diagnosed with cancer and subsequently passed away 6 weeks later. 1 week after his death my mother-in-law was diagnosed with early dementia. My father-in-law expected to live well into his 90's like his dad and was expecting to pass away first. He looked after all the finances in the house and my MIL never really had anything to do with that side of things.

Once my MIL was diagnosed with dementia they took her for the capacity test. She never had anything to do with business of household finances so was unaware of the size of the estate. My FIL was the only shareholder in his business although in the final stages he added my wife and her sister in as directors. They both hold POA and are taking care of closing one business and selling another.

The original plan by the solicitors was to gift much of the estate but after the test they are saying this isn't possible and any money from assets sold would need to go into an inheritance tax investor scheme (which sounds unstable).

In terms of the estate, it will likely be over £2m. They had a spousal will which meant everything went to the other person and once that person passed away it was shared between named members in the will.

The estate includes a number of expensive classic cars and number plates.

To be able to not get stung by inheritance tax, because my FIL worked until his late 70's to provide for the family is there a way that my MIL could gift some of the estate and still be left with £1m to cover care costs? There is an estranged daughter (not my FIL's) who is named in the will for a decent amount, but they were trying to protect my FIL's daughters from a possible future claim as he wasn't really involved with the daughter.


Is there a way to gift the cars and numberplates and then once sold, add that money into investments/savings in my wife and her sisters names so if the care costs were above £1m the money is held, but likely not affected by IHT if my MIL lives longer than 7 years.
 

Shedrech

Volunteer Moderator
Dec 15, 2012
12,215
0
Yorkshire
Hello @MonCherie
Welcome to DTP

My condolences on the death of your father in law, so hard for your mother n law

I really think you need specific professional advice ... members her can offer support and opinions but we're not experts and can't give advice in any professional capacity

All Attorneys with LPA must act only in the best financial interest of the donor ie your mother in law ... her money is hers now and only becomes inheritance after her death

Maybe something here will be helpful
And
 

Jessbow

Registered User
Mar 1, 2013
4,231
0
Midlands
do seek advice, you can gift fairly substantial sums, but there are limits beforeit has tax implications for the recipient
 

Bod

Registered User
Aug 30, 2013
1,547
0
You need a good Financial Advisor, rather than a solicitor, for this.

Bod
 

MonCherie

New member
Jun 23, 2022
6
0
Thank you to all replies.

On another question. Any assets that the daughters want, can they be purchased for the probate cost if needed?
 

Jessbow

Registered User
Mar 1, 2013
4,231
0
Midlands
Depends who did the probabate valuations to an extent.

You were talking about classic cars- were they professioally vaued for probabate or did someone guess?
 

MonCherie

New member
Jun 23, 2022
6
0
Depends who did the probabate valuations to an extent.

You were talking about classic cars- were they professioally vaued for probabate or did someone guess?
The solicitors arranged it they were done by an independent consultant who specialises in the area.
 

MonCherie

New member
Jun 23, 2022
6
0
If sold at a fair market price I can't see there being any problems, however they may be auctioned.
Yeah, we are in charge of that. Some of the cars are via the old business and 3 are personal. We are free to look at different ways to sell. I just wasn't sure if we could buy any ourselves if it was at probate valuation or close.
 

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