How to UK avoid inheritance tax?

Question

So we going to inherit 3 properties from parents. What is the best way of avoiding inheritance tax? I thought maybe registering a company and signing all the properties to the company. This do-able?

Answer 1

I honestly would suggest you get a good financial advisor on this one.  

There are ways around it, but far too complicated for me to even try and explain.

Answer 2

Why dont you just get them to sign the properties over in your name before hand. It will save a h**l of alot of trouble & money.

Answer 3

You avoid inheritance tax by inheriting less than £312,000 or some similar amount, the tax is applicable to funds or assets transferred to companies or trusts. Avoiding tax is called 'tax evasion' and is a crime you will lose a lot more money by doing this than you could hope to gain.

Answer 4

Don't go for Hales' suggestion, your parents could end up with massive Capital Gains Tax bills doing it that way, even if no money changes hands. Also if your parents wanted to stay in one of the properties (which I would assume is their main home) they would have to pay you an economic rent, otherwise the transfer would be disregarded for IHT purposes. You also have to consider that if one of you was to get divorced or bankrupt, they could lose their home, and you at least half your asset.

The transfers would also have to be made at least 7 years before the deaths to avoid IHT.

Think about creating a Trust, and consult a good financial advisor. That costs, but it is worth it.

Answer 5

Youre plan is possible, however there are many other complications.  Your best bet is to take advice on I.H.T. planning, one of the best is with Norwhich Union.  It works by making a proportion of your funds "a Gift" which is deposited with the company who administrate it on your behalf.

Walk into any bank and ask for I.H.T. planning details