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Hello,
Here is a summary of the situation presently faced by myself and three siblings re. Inheritance Tax. I am hoping someone can clarify our position, our liability and options to legally avoid IHT.
My father died in 2009 leaving a sum of money in trust that will eventually be inherited by myself and three siblings, so that his wife could benefit from the income generated by it. His Will states that she can do that until she dies or until agreement between her, us and the other trustee that she can live in the manner she was and is accustomed to without the income from our inheritance, at which point it will be disbursed to myself and my siblings. My father's wife, at the time of his death, is not my mother. The invested money is recognised as being our inheritance on her death or if her receipt of its income ceases beforehand, but it is not something we presently own and oversee payment to her from. One of my siblings, however, is one of the three trustees of my father's Will and estate. The value of the funds in trust that my father's wife benefits from is in the vicinity of £800,000.
Observing my father's wishes, we have allowed his wife to benefit from the income from the trust for the 12 years since his death, but we have begun to approach her to ask her to conceed that her lifestyle will not be compromised if she relinquishes receipt of the trust's income and allows us to 'inherit' it. We know this to be the case, but we need her agreement to effect any change. So, in the event this happens, where do we stand regarding IHT? Have we already passed the seven-year threshold, given the fact that she has been receiving the income from our invested inheritance for the past 12 years, or do we need to become the owners of the trust now and then let her take its income for the next seven years in order to legally avoid IHT?
If someone can advise me as to where we stand in this situation, I'd be very grateful. If you need any more information to give a definitive answer, I will be happy to provide it.
Thank you.
Rupert.
Here is a summary of the situation presently faced by myself and three siblings re. Inheritance Tax. I am hoping someone can clarify our position, our liability and options to legally avoid IHT.
My father died in 2009 leaving a sum of money in trust that will eventually be inherited by myself and three siblings, so that his wife could benefit from the income generated by it. His Will states that she can do that until she dies or until agreement between her, us and the other trustee that she can live in the manner she was and is accustomed to without the income from our inheritance, at which point it will be disbursed to myself and my siblings. My father's wife, at the time of his death, is not my mother. The invested money is recognised as being our inheritance on her death or if her receipt of its income ceases beforehand, but it is not something we presently own and oversee payment to her from. One of my siblings, however, is one of the three trustees of my father's Will and estate. The value of the funds in trust that my father's wife benefits from is in the vicinity of £800,000.
Observing my father's wishes, we have allowed his wife to benefit from the income from the trust for the 12 years since his death, but we have begun to approach her to ask her to conceed that her lifestyle will not be compromised if she relinquishes receipt of the trust's income and allows us to 'inherit' it. We know this to be the case, but we need her agreement to effect any change. So, in the event this happens, where do we stand regarding IHT? Have we already passed the seven-year threshold, given the fact that she has been receiving the income from our invested inheritance for the past 12 years, or do we need to become the owners of the trust now and then let her take its income for the next seven years in order to legally avoid IHT?
If someone can advise me as to where we stand in this situation, I'd be very grateful. If you need any more information to give a definitive answer, I will be happy to provide it.
Thank you.
Rupert.
