Over the IHT threshold? Reduce it down - or do nothing?

We donate to 5 charities on a monthly basis and sponsor a child in Africa. We help out our children quite a lot with expenses for house updates/renovations and take them, their partners and our grandchildren on holiday once a year. As long as we have enough savings left for a comfortable old age, we'll continue to do so. I know we are in a very fortunate position to be able to help our children whilst we are still still alive - we were both brought up by parents who had nothing, and everything we have has been gained through hard work and a bit of luck! In a nutshell - keep enough savings (if you can) to maintain your standard of living but give the rest away!

Ditto Curlywhirly.

Exactly

It seems to me that more could/should be done to iron out these inequalities via the tax system before such wealth accumulates.

People say that they have worked hard for their money and resent the thought of it going to 'the govt'. But if those people have an extended stay in hospital, the nurses who care for them also work hard but don't earn anything like enough to accumulate large savings, and often rely on public services funded by taxation. Is this just?

IHT is a great leveller. I would like to see it hypothecated, so that the govt uses it in visible ways.

Posters are talking about savings, but if they own their home and are mortgage free, that is likely to be worth a lot more than their savings. That makes downsizing a sensible thing to do - and IHT downsizing relief means that the relief which would have been available based on the value of the old home is the same for the new home.

I'm fortunate be ause we have a 6 bedroom house we've paid the mortgage off, a 7 bedroom holiday home in France with no mortgage and 11 btl houses. 2 with no mortgages and the others with low mortgages less than £70k left on 5 of them. None have more than 100k left on them. DH and I both do the gifting to my DC. We give them 2 payments of £500 each a year. We gift DGS's £250 each per year. I also give them generous amounts for birthdays and Xmas and DH and I pay for any family holidays when we go to our holiday home. I've helped out DC with deposits for their mortgages and bought DD a used car when her car engine blew up last year, to enable her to get to work and drive the DGS's around. I've also bought my younger sister sister we ho isn't too well off a used car when hers failed MOT and she needed one to get to work. I've helped out my niece when she went to uni by paying her a monthly direct debit for 4 years tomhelp her to live on as I knew my sister didn't have much to give her and I knew most other students would get financial help from family. I've helped my nephew out to pay his mortgage when he had a car crash several years ago fractured his spine and he couldn't work for about 9 months and he only got statutory sick pay from his employer. I'd rather help my family out with funds rather than paying even more tax to government. DH is still working until the end of March this year when he retires and he's been paying 40 percent tax for years. He says 40 percent on his share of btl houses too so we think we pay our fair share of tax. If we don't need to go into a home for care I know we will end up paying IHT. We live quite well. Its cold we put heating on. We have cruise holidays We love. We sponsor a child in Ghana. I donate monthly to Cats Protection League and DH donates to Centre Point, a homeless charity.

I would suggest that you do a little tax planning asap.

When we downsized we were left with a balance of cash which we've used to help all our children to move to nicer/bigger homes. I should stress that we're left with enough cash to live comfortably, you need to be careful not to give away more than you can really afford - and to live for seven years!

Oh to have that problem

We each have an allowance of £325k and I inherited my husbands when he died. So £650,000 before inheritance tax. Like other grans the children will inherit my flat and any other investments. In my forgetfulness I think the govt added another allowance and seem to recall that there would be no inheritance tax to pay. We put our savings into ISAs so no tax payable. In the meantime, I am still getting taxed as my state and work pension are put together for tax. In the meantime I do not need much so I give quite a bit to charities mainly for dogs, heart, Salvos and crisis at Christmas. I have had a good life and if there is tax to pay so be it. I never inherited anything as my parents had little. I do not complain. BTW we did buy twin beds with electric controls and we got them VAT free because of health reasons.

newnanny

I'm fortunate be ause we have a 6 bedroom house we've paid the mortgage off, a 7 bedroom holiday home in France with no mortgage and 11 btl houses. 2 with no mortgages and the others with low mortgages less than £70k left on 5 of them. None have more than 100k left on them. DH and I both do the gifting to my DC. We give them 2 payments of £500 each a year. We gift DGS's £250 each per year. I also give them generous amounts for birthdays and Xmas and DH and I pay for any family holidays when we go to our holiday home. I've helped out DC with deposits for their mortgages and bought DD a used car when her car engine blew up last year, to enable her to get to work and drive the DGS's around. I've also bought my younger sister sister we ho isn't too well off a used car when hers failed MOT and she needed one to get to work. I've helped out my niece when she went to uni by paying her a monthly direct debit for 4 years tomhelp her to live on as I knew my sister didn't have much to give her and I knew most other students would get financial help from family. I've helped my nephew out to pay his mortgage when he had a car crash several years ago fractured his spine and he couldn't work for about 9 months and he only got statutory sick pay from his employer. I'd rather help my family out with funds rather than paying even more tax to government. DH is still working until the end of March this year when he retires and he's been paying 40 percent tax for years. He says 40 percent on his share of btl houses too so we think we pay our fair share of tax. If we don't need to go into a home for care I know we will end up paying IHT. We live quite well. Its cold we put heating on. We have cruise holidays We love. We sponsor a child in Ghana. I donate monthly to Cats Protection League and DH donates to Centre Point, a homeless charity.

Your "detailed" post tells us you are extremely financially comfortable newnanny . If would echo what Germanshepherdsmum said and consider your future tax position carefully , including the 7 rule , if gifting to your children is something you are thinking about .

I'm not sure about the whole blinkin' subject.
To start with, we have to remember that someone who inherits has actually lost someone dear. Some of us much sooner than we would have thought. So, for those heirs, paying IHT under the circumstances is just one of those things which you tend to do without question.
In an effort to do things right by the book it's probably best to get professional advice, though I don't doubt that declaring every little thing does attract some taxation which could easily have been avoided surreptitiously hidden somewhere.
If you've been heavily clobbered not once, but twice, you then start to have a different outlook on things when administering your estate and dishing things out for the next generation.

I found newnanny’s post pretty offensive and unnecessarily detailed given what some here have posted about their financial situation. Instead of boasting about all the properties she and her husband have, how many bedrooms they have, what is or is not owing on mortgages and their largesse towards family and just a couple of charities and a kid in Africa she would do well to pay attention to the huge IHT bill they will face if they don’t get rid pdq and give more to charity. I don’t think I have ever read such an unpleasantly boastful and tactless post.

Germanshepherdsmum

I found newnanny’s post pretty offensive and unnecessarily detailed given what some here have posted about their financial situation. Instead of boasting about all the properties she and her husband have, how many bedrooms they have, what is or is not owing on mortgages and their largesse towards family and just a couple of charities and a kid in Africa she would do well to pay attention to the huge IHT bill they will face if they don’t get rid pdq and give more to charity. I don’t think I have ever read such an unpleasantly boastful and tactless post.

Certainly " reading the room " is not amongst newnannys assets.

I agree GSM, some of us worked hard in the NHS and can only dream!

I agree GSM - that was a rather boastful post by newnanny. - newnanny is in a different league altogether. I hope she is as open and honest with the IR …

Don't forget, if you are giving money to people who are on benefits, even if they're working, will soon have the dwp checking out their finances.

ISAs have been mentioned. Your spouse or civil partner can inherit your ISA without IHT being due.

But with anyone else it is treated as part of your estate for IHT calculations.

Count me in Bridie Poor old NHS worker no great wealth, not a lot left to give to anyone but I have a decent heart and live a reasonable life
Nothing at all to boast about though and brought three children up to be successful people with NO help and no finances from their father, done it all myself.

Definitely going to spend until we are below the IHT level! Already paid plenty of tax, saved up and bought a holiday home abroad. Now selling that and paying Capital Gains tax on any increase in value. Definitely not paying another 40% on top of that when we are gone. It’s premium economy travel for us now. Can’t quite bring myself to pay business class!! Don’t mind donating to worthy charities but don’t trust any of the political parties to spend it sensibly.

Birthto110 Any money left to charity in your will is deducted before IHT is calculated. So, if you are prepared to change your will if savings increase you could leave a sum to one or more charities that will keep your whole estate value just under IHT.

That’s right. I have left money to all the charities to whom I make regular donations, probably about a dozen, but did so to benefit them rather than reduce IHT. I would give money to a chosen charity rather than the government any day. It’s always possible to increase the amount you leave to charity in your will, easily and cheaply. I keep an eye on things with that in mind. You should review your will regularly.

With nowhere near the assets newnanny was boasting about I give my DC far more than that a year. She does sound rather tight.

In my experience those with the most money are the least likely to spend it.

My mum and stepfather sold 75% of the equity of their house. They went on fabulous cruises and trips and generally lived the high life. When they both had to go into care homes because of dementia the house was sold and they were left with £28000 each. They are both in different council run homes and are very well looked after by the lovely staff. They were allowed to keep £23000 each and get £25 a week “spends”