that you can avoid inheritance tax after just two years instead of the usual seven years?
Did you know that you don’t need to survive seven years to avoid Inheritance Tax? The seven year rule is very handy. You can transfer your assets or your capital to someone else (usually your children) and if you survive seven years, there is no IHT to pay. Sounds good doesn’t it? BUT
Firstly, you have to survive the seven years. If you die even a day before the seven years are up, it usually fails totally. There is taper relief available, but that only applies if the gift is above £325,000 and only applies to the inheritance tax on the excess. So for most people it is no use.
Secondly, you lose control. If something goes wrong with the donee – and there are lots that can go wrong – you have no redress.
Third, you must retain no benefit. Otherwise the gift is valid but there is no IHT saving. So you have made matters worse. For example, if you transfer your house to your children but you continue to live in it, then you have created a capital gains tax liability for them, but will receive absolutely no saving in your inheritance tax. Many people are caught out under this rule. You can avoid the catch by paying full market rent, but you have to pay the FULL market rent until you die, not just for 7 years. Your children have to pay tax on the rent and again your children have the capital gains tax problem.
However with a McClure Business Relief Product you can avoid these problems. The investment is 100% inheritance tax exempt after just two years. For couples it is even better. If the Will was drawn up correctly then, as long as one of you survives the two year period, you will avoid the IHT altogether.
You also keep control as the funds are yours. You have not given anything away. You can even take an income from the investment if you want. And you can change your mind.
This is suitable for your capital i.e. your money and investments. For property we have other options.
We offer a detailed Report and Recommendation for a token payment of £99. You then decide whether to take our advice or not.
We provide our expert IHT advice to clients throughout England, Wales and Scotland. In an average month we see about 10 clients. Their total assets are about £15.5M. Their total IHT liability is about £4.1M and our advice can save them about £2.8M. That’s just in one month.
So why not contact us. Remember everyone’s circumstances are different and general advice is not much use. You need to have detailed advice from advisers you can trust.
Home visits are also available.
McClure Solicitors in association with McClure Wealth Management