Tax Planning Queries – Who to Listen to?

It is common for us to sit and chat over a cup of tea about what one person has heard or been told, but is it always right to take tax advice from a friend over a cup of tea? Recently, I was sat on a train and I overheard a conversation where one lady was giving advice to another about how to avoid paying inheritance tax on her estate. She was completely wrong, and the advice she was giving would have left the lady paying larger amounts of inheritance tax and missing out on the available inheritance tax reliefs.

Further to this, have you ever had someone tell you to transfer your home into your children’s names to avoid care fees? In actual fact, if you transfer your home to a child, the local authority have the power to review this transaction and see whether you were trying to avoid care fees. If they consider you were trying to avoid care fees, they can overturn the transfer and use your property to pay for the fees.

Also, have you considered what would happen if your child became bankrupt? Your property would then form part of their assets and could be seized by creditors. Or what would happen if your child died, your house would then form part of their estate and would pass following their wishes in their Will. You could end up in a situation where your grandchild owns your house, they want to sell it and there would be nothing you could do. Further to this, if a child gets divorced then the property will then form part of the financial settlement and may need to be sold to meet the terms of such settlement.

There are a lot of organisations who are visiting clients at their homes, promising them they can protect their estate from inheritance tax and avoid paying for care fees. These organisations may suggest that you put your house and bank accounts into a trust for them to hold until you die, promising that this will reduce the amount of care fees and inheritance tax to be paid. Quite often, these promises are completely false.

We recommend that you, or any of your family seek independent legal advice to ensure that you are given correct and sensible advice with regards to care fees and inheritance tax planning.

Annie Beaumont

Annie Beaumont

 

Annie Beaumont
Paralegal
Private Client Team
ABeaumont@LawBlacks.com
0113 227 9269

This entry was posted in Wills and Probate. Bookmark the permalink.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s