Inheritance Planning

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Starting Out

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Hi,

I've a question on inheritance planning and tax I am looking for some help on.

My wife at some point will inherit the family farm.
If she is to avoid a significant inheritance tax bill, she needs to have the resulting farming assets make up 80% of her overall assets post inheritance. These assets includes our current family home.

We are in the fortunate position to have enough equity in our home that will mean she won't meet the 80% threshold above without taking an action now. We do however have a mortgage.

We had preliminary advice that suggested moving the house under one name would be prudent tax planning. However when discussing this with the bank (KBC) we kept hitting obstacles about married couples both being required to be on the mortgage and as a result, both on the deeds.

I'm not sure if this is a Central Bank type regulation or a bank specific policy.
Looking for some suggested next steps on progressing here.
I'm of a mind to start discussions with another bank for re-mortgaging but not sure if this will be wasted effort. Thanks for any suggestions here.

Starting Out
 
Starting Out said:
Hi,

Not too sure what point you're making? Have you any practical advice?

Thanks, Starting Out
Click to expand...
Yes, get proper professional advice. Switching the title on your home will be seen as artificial tax avoidance if the principal benefit of doing so is to garner a tax advantage. I'd be worried that your advisor doesn't know this. It's basic stuff.
 
As regards the banks it is in general most banks policy that mortgages on the family home must be in joint names.
 
Hello,

Have you thought about business relief? Is the farm currently being operated as a trade/ business ..

If it is this relief operates in much the same way as agricultural relief in terms of reducing the value of the assets by 90%.. there is no restriction on the assets you as a couple own...


Second point ...
To get round the farmer test for agricultural relief is to up your wife’s farming assets before she inherit.. i know it involves spending money but that money would otherwise be lost on tax..

Also get a valuer / auctioneer who is friendly!!


Will your wife inherit from parent? Or aunt or uncle .. maybe favourite niece relief might be appropriate...

Just a few thoughts !!
 
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