I've been told that if you don't make a will, if your estate is over some
amount, 250K I believe, the government takes the rest or wants 40% of the
rest? Is this true? My wife and I live in the south east, and not
surprisingly, our house is worth around this figure, so I'm a little
concerned, should I die (the house is in my name) that she might get a large
tax bill, if I do not make a will. Surely this is not right?
To complicate matters slightly, my wife is not English, so is not domiciled
here for tax purposes.
Hi, The nil rate band is now at 263K.
All gifts and transfers on death between spouses are IHT exempt.
It is on the death of the remaining spouse that IHT might be accountable,
depending on the value of the estate.
As you are the sole owner you should still make a will giving your spouse a
life interest and right of residence in the property.
If you die intestate(no will) your wife does not have an automatic right to
stay in the home.
So how SHOULD I ensure she is able to live in our family home, which I
bought, by myself, before we even met or got married, should I die for
whatever reason before her?
The best solution I've found to date is a discretionary trust will, as
detailed at http://www.tenminutewill.co.uk/pdffiles/discretionary_trusts.pdf
No, she has business interests abroad, and our accountant advised her to
register as not being domiciled in the UK, so we'd only pay UK tax on money
she brings (remits) to the UK, not whatever money she makes abroad. I
brought this issue up, because I believe there is some sort of different
treatment for IHT or gifts between husband and wife should either partner
not be domiciled in the UK. She rents out a house she used to live in there,
and then uses the money when she's abroad. I suppose she should probably
make a will too.
That is a biut dangerous becuase some of the schemes it advocates to
allow the surviving spouse to have access to the trust assets are now
under threat from the Capital Taxes office which would regard some of
the the schemes as leaving the spouse with an interest in possession,
and therefore taxable as though they owned the assets in the trust.
The best way is to leave your dosh to a trust and leave the house to her
but let the trust accept an IOU from her to the value of the house.. It
is v.important that the house does NOT go into the trust but directly to
her. The will needs to specifically allow the trust to accept an IOU in
lieu of the value of the house.
So she is paying Income Tax on a remittance basis?
Yes and no. She pays income tax from her job here in the UK, and doesn't
actually bring any money into the UK, so pays no actual tax on a remittance
basis, although she would do, if she brough the money to the UK. Does it
make a difference?
No, I thought ANY transfer of assets between husband and wife, where one or
other were not domiciled in the UK was subject to CGT and/or IHT. I know
nothing about this 55K exemption. Please explain. Thanks.
Depending on whether the house is held as joint tenants or tenants in
common. In many marriages the house (or even 50% of the house) doesn't
even form part of the estate of the first of the couple to die - thereby
wasting most of a nil-rate IHT band.
GSV Three Minds in a Can
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