I think your neigbour may be being too cautious. The 7 year taper relief rule on gifts is detailed on the UK government website and details the sliding percentages that apply to sums gifted over the £325k allowance. You can give away as much as you like but it will be taxed on this scale if you don't live for 7 years.elusive wrote:Re the seven year. A neighbour who did trust planning etc said in reality the 7 seven year rule doest excist because if HMRC thinks the asset was given away with the intent to avoid taxes they can go after you at any time .of course its only relevent if the estate is above the IHT limit anyway.
Inheritance tax allowance increase in 2018
Re: Inheritance tax allowance increase in 2018
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Re: Inheritance tax allowance increase in 2018
On a slightly different butvrelated note. Does anyone know how IHT is applied in Spain to UK properties that are Joint tenancies?
Specifically.....Joint tenants can’t pass on ownership of the property in a will to anyone. The surviving joint tenant continues ownership.
So the property cannot be left in a will so the survivng tenant is not inheriting the property.....does that mean it falls outside ofthe scope of Spanish IHT?
Specifically.....Joint tenants can’t pass on ownership of the property in a will to anyone. The surviving joint tenant continues ownership.
So the property cannot be left in a will so the survivng tenant is not inheriting the property.....does that mean it falls outside ofthe scope of Spanish IHT?
Re: Inheritance tax allowance increase in 2018
Sorry i ment they can go after you even if the person lives more than seven years if they think the reason for giving away the asset was to avoid tax. No idea myself as i should be so lucky to get grannies ex london council house "gifted"D1ckyS wrote:I think your neigbour may be being too cautious. The 7 year taper relief rule on gifts is detailed on the UK government website and details the sliding percentages that apply to sums gifted over the £325k allowance. You can give away as much as you like but it will be taxed on this scale if you don't live for 7 years.elusive wrote:Re the seven year. A neighbour who did trust planning etc said in reality the 7 seven year rule doest excist because if HMRC thinks the asset was given away with the intent to avoid taxes they can go after you at any time .of course its only relevent if the estate is above the IHT limit anyway.
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Re: Inheritance tax allowance increase in 2018
Look at it another way. Has the survivors asset base increased as a result? Yes, they have and the change wold have to be declared on Form 720. My best (after dinner) guess is that the Spanish taxman will ignore UK law and just make it liable to tax. It’s a bit like ISAs, they are tax free in the UK but not in Spain.Paddy Pumpkin wrote:On a slightly different butvrelated note. Does anyone know how IHT is applied in Spain to UK properties that are Joint tenancies?
Specifically.....Joint tenants can’t pass on ownership of the property in a will to anyone. The surviving joint tenant continues ownership.
So the property cannot be left in a will so the survivng tenant is not inheriting the property.....does that mean it falls outside ofthe scope of Spanish IHT?
You need a pro to answer this one.
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Re: Inheritance tax allowance increase in 2018
yes true, there are many types of income that is tax free at source but the Spain taxes it if you are a resident. I have tried the pros....waste of time so far! I haven't yet found one I am happy with and that gives correct information. It seems I have read more on the subject than them and they just want to try to sell me a solution to a problem I don't have.
Re: Inheritance tax allowance increase in 2018
I think i would be inclined to initially show my portion of the value of a property owned in this way as 100% on the 720 . This seems to be an honest and logical assessment due to the fact that each of the joint owners while living legally owns 100% of the property as opposed to 50% when bought as Tenants in Common ( i could have that wrong , it might be the other way around ) so when one dies they gain nothing their wealth has not increased so they have no gain or inheritance to declare, only when the property is sold while both living are the proceeds divided , until then neither owners have the right to pass on their share to another in any manner including bequeathing it in their will . For more than one person to each own 100% isnt logical in reality but this is a legal matter in the same way loans granted to more than one person makes all the signatories liable for 100% , institutions dont expect each to repay them the full amount but cover themselves legally so that they can chase either for more than a logical share . Guess it comes down to what definition takes president , logic or the Law .
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Re: Inheritance tax allowance increase in 2018
Very valid points and it something I considered....but then you could have to pay wealth tax twice and at a marginal higher rate. There are a few forms of ownership outside Spain that don't fit into the law here....or do fit in to the Spanish system but not in a way the authorities intended. Leaseholds and life interests have their valuation reduced depending on the age of the leaseholder. So owning a UK property on leasehold and being of pension age in Spain will see you property valued at about 30% of it's Spanish valuation ( purchase price)......just don't ever sell it as then you will be murdered with CGT.
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