@Rob7Lee advice seems to cover all the bases. When it comes to IFAs, I've been critical of them as an industry,largely due to my earliest experience with them. Once you've done the basic survey Rob suggests, that sounds like the time to get an IFA on the job. The IFA might suggest a re-structure, and that's what I got re my pensions some 14 years back, it was well worth it. However he then wanted to keep control of the investment activity on my SIPP (with ongoing fees) and I felt confident enough to do that myself, so we parted ways. You might not feel that way, or not for a while, but it's worth thinking about and splitting your agreement with the IFA on that basis. As for who, having read the irrascible old bastard for years on this thread, I'd say that in your shoes, I'd definitely be making @golfaddick your first point of call
@Rob7Lee advice seems to cover all the bases. When it comes to IFAs, I've been critical of them as an industry,largely due to my earliest experience with them. Once you've done the basic survey Rob suggests, that sounds like the time to get an IFA on the job. The IFA might suggest a re-structure, and that's what I got re my pensions some 14 years back, it was well worth it. However he then wanted to keep control of the investment activity on my SIPP (with ongoing fees) and I felt confident enough to do that myself, so we parted ways. You might not feel that way, or not for a while, but it's worth thinking about and splitting your agreement with the IFA on that basis. As for who, having read the irrascible old bastard for years on this thread, I'd say that in your shoes, I'd definitely be making @golfaddick your first point of call
I think it is a bit of a shame that you have done this this way, and I didn't even get the chance to discuss it.
As I mentioned a couple of times, i think this competition has been helpful to everyone beyond the competitive element, namely the element of discussing openly the issues which we think might affect the index. This would especially help those who come on here quite unsure about investing and looking to learn something. If they are getting into investing, especially with funds, such discussion can help shpae their views, rather than just piling into fund names we toss out there. You've taken that away and even made the forecasts themselves 'covert'.
And did enough people get a chance to express their view on the interval (3/4/6/12 months)?
I'm sorry, I don't like this at all. Apart from anything else I fear it perpetuates the perception among Lifers that this thread is full of well-off people being very smug and full of themselves.
I'm willing to be persuaded but right now I feel I'll give this a miss.
Sorry but I don’t see the problem Prague. Your guess in by the 7th after which RobLee will compile a spreadsheet and post it up with everyone’s guess. In July we go again. There is nothing to stop discussion and opinions and offering advice as normal. It may have be nice for Rob to consult you but I think you are making a mountain out of a molehill, in my opinion.
Ok maybe it was partly the hangover talking. I think the bit about @Rob7Lee sending me his score for transparency reasons really made me uncomfortable that anyone would think it necessary. Looked to me like it was, or had become, less a “bit of fun” than I had seen it.
Regarding the time frame, one of the options I wanted to throw in was that it would be fun to mesure ourselves against pro pundits, especially as a group. This would need a 12 month span, but that would then be too long before the fun starts. However it could be done if we placed our 12 month predictions alongside the 6 month ones, and then the 12 month ones become de facto the prediction for the 2nd half. I thought that this might encourage everyone to think longer term like we who are into it always advise newer punters to do. But if there’s no appetite for that, there we are.
Either way, I hope people will share their thoughts about what drives their forecast, even if they dont give their actual figure. That was what I appreciated about the first two.
Looks like I missed a 'frank exchange of views' yesterday!
My two pen'th.
I like the idea of setting the 12 month target now but then also have quarterly targets. That would keep the interest throughout the year and allows people to adjust and not lose interest if they are way off. The 'gold star' should definitely go to the 12 month winner!
I think it should be a 'secret ballot' but published immediately on close of entries (end of this coming week?), not because I have a cynical view of people on here, just because group think inevitably steers the herd and you'll get a more interesting spread of views if it's 'blind'.
Last, the above doesn't preclude anyone from putting forward their views and rationale, before or after. I'll certainly be putting my views forward, just as soon as I've worked out what they are!
I think it is a bit of a shame that you have done this this way, and I didn't even get the chance to discuss it.
As I mentioned a couple of times, i think this competition has been helpful to everyone beyond the competitive element, namely the element of discussing openly the issues which we think might affect the index. This would especially help those who come on here quite unsure about investing and looking to learn something. If they are getting into investing, especially with funds, such discussion can help shpae their views, rather than just piling into fund names we toss out there. You've taken that away and even made the forecasts themselves 'covert'.
And did enough people get a chance to express their view on the interval (3/4/6/12 months)?
I'm sorry, I don't like this at all. Apart from anything else I fear it perpetuates the perception among Lifers that this thread is full of well-off people being very smug and full of themselves.
I'm willing to be persuaded but right now I feel I'll give this a miss.
Sorry but I don’t see the problem Prague. Your guess in by the 7th after which RobLee will compile a spreadsheet and post it up with everyone’s guess. In July we go again. There is nothing to stop discussion and opinions and offering advice as normal. It may have be nice for Rob to consult you but I think you are making a mountain out of a molehill, in my opinion.
Ok maybe it was partly the hangover talking. I think the bit about @Rob7Lee sending me his score for transparency reasons really made me uncomfortable that anyone would think it necessary. Looked to me like it was, or had become, less a “bit of fun” than I had seen it.
Regarding the time frame, one of the options I wanted to throw in was that it would be fun to mesure ourselves against pro pundits, especially as a group. This would need a 12 month span, but that would then be too long before the fun starts. However it could be done if we placed our 12 month predictions alongside the 6 month ones, and then the 12 month ones become de facto the prediction for the 2nd half. I thought that this might encourage everyone to think longer term like we who are into it always advise newer punters to do. But if there’s no appetite for that, there we are.
Either way, I hope people will share their thoughts about what drives their forecast, even if they dont give their actual figure. That was what I appreciated about the first two.
Looks like I missed a 'frank exchange of views' yesterday!
My two pen'th.
I like the idea of setting the 12 month target now but then also have quarterly targets. That would keep the interest throughout the year and allows people to adjust and not lose interest if they are way off. The 'gold star' should definitely go to the 12 month winner!
I think it should be a 'secret ballot' but published immediately on close of entries (end of this coming week?), not because I have a cynical view of people on here, just because group think inevitably steers the herd and you'll get a more interesting spread of views if it's 'blind'.
Last, the above doesn't preclude anyone from putting forward their views and rationale, before or after. I'll certainly be putting my views forward, just as soon as I've worked out what they are!
For sure I was hoping to hear what you thought before we set up this time.
In your set up above, if I understand correctly, the 12 month forecast would remain separate and unchanged, regardless of how people do in the 3 month? Don't you think 3 months is a bit short?
I take the point about avoiding herd mentality with a secret ballot, (although the person you send them to (@Rob7Lee) will have a tough time disengaging from that, not sure I could) so long as people still share their overall thoughts, which I think is where the whole thing adds some value beyond the competition element.
I thought we were worried about destroying the fun of it...
I think the best, easiest, quickest and most importantly way to avoid moaning, would be for everyone to say NOW where they think the year will end, and then to have a quarterly forecast.
So for example, now we give Dec 31, and March 31, then towards the end of march we give June 30, then June we give Sep, Sep we give a NEW December knowing what we do now. So effectively there will be 2 December competitions, one will be the quarterly and the other the "locked in" Dec 31 value.
This gives people who join this thread the opportunity to get involved in the quarterly forecasting.
That way you effectively have 2 decent games going at the same time.
Having fully read @WishIdStayedinthePub's post since I wrote this... Basically... What he said...
I am only a lowly financial adviser & not a tax expert but it's my view that its the Estate that pays any IHT due, not the individual who receives the gift. Also, if it is the Estate who pays & the deceased owned a residential property then the IHT threshold is now £500,000......and doubled to £1m if the deceased was a widow(er) who had previously inherited their spouses Estate.I would speak to the solicitors / executors who would be in a better position to help.
"People you give gifts to will be charged Inheritance Tax if you give away more than £325,000 in the 7 years before your death."
The above link also gives some good examples of how it works/order etc. The reason bob and I have mentioned £325k is any gifts (one assumes) would not be the residential property, again link above explains. Plus the Property amount only applies on estates up to certain values and who the property is left to. If estate is more than £2m or you are leaving to anyone other than children/grandchildren you don't get the extra allowance anyway.
Question please for any inheritance tax specialists: If IHT is payable on a gift given less than 3 years before the death of person gifting, does the 40% IHT have to be paid by the gift recipient or from the deceased’s estate?
I’m sure I heard someone say that the length of gift before the 7 years affects the amount of IHT paid . No idea of the numbers but say that gift was received 6 years and 51 weeks before the death of the person gifting you wouldn’t get hit with 40% .
Yes theirs a taper relief as below;
less than 3
40%
3 to 4
32%
4 to 5
24%
5 to 6
16%
6 to 7
8%
7 or more
0%
So, yes, this is a real scenario I currently face. Here’s the whole picture:
My 81 year old dad is very unwell at the moment, suffering in DV Hospital with cancer, covid and now pneumonia which, as you can imagine, has brought this and other considerations to the fore. Basically, he ‘gifted’ me £215k in 2019 which paid off my mortgage and gave me money to renovate my home. To give you the whole picture, he owns a home in his own name worth £350k and lives with his partner there albeit they are not married as she is married to someone else and no divorce proceedings exist for them to get married. He has 2 separate bank account balances of £170,000 (total £340k) held in joint names with him and me and him and his partner all of which he had solely funded, not us. He (wrongly) thinks that IHT wouldn’t apply to half of those balances because they are in joint names.
Its also worth saying that I am both, as his sole descendent, the major beneficiary in his will but also the executor of his will.
It did appear to me, from looking at the government guidance on line, that I (the beneficiary of the £215k gift) am, currently, personally liable for 40% of the £215k in the event that we lost dad, so that would be £86,000. Given that the whole of the £215k has been ‘spent’ on the renovation and mortgage repayment, being personally liable for £86,000 IHT would effectively mean that I would have to take out a mortgage to pay the IHT - ironically almost exactly the balance paid off using dad’s gift money.
Additionally, I have been considering how much IHT would be payable on dad’s existing assets which, as detailed above, total £690,000. With him leaving me, his descendant, the house, it seems that IHT payable on dad’s assets, would be £76,000. That makes a total IHT bill of £162,000.
Do those of you with more experience of IHT matters and/or ‘in the know’ agree with my assessment of things?
Any guidance or suggestions would be welcomed. I am pretty sure that you will tell me that there’s not much that can be done other than continue to pray that dad comes through his illnesses such that the IHT payable on the ‘gift’ reduces as the years go by.
I think it is a bit of a shame that you have done this this way, and I didn't even get the chance to discuss it.
As I mentioned a couple of times, i think this competition has been helpful to everyone beyond the competitive element, namely the element of discussing openly the issues which we think might affect the index. This would especially help those who come on here quite unsure about investing and looking to learn something. If they are getting into investing, especially with funds, such discussion can help shpae their views, rather than just piling into fund names we toss out there. You've taken that away and even made the forecasts themselves 'covert'.
And did enough people get a chance to express their view on the interval (3/4/6/12 months)?
I'm sorry, I don't like this at all. Apart from anything else I fear it perpetuates the perception among Lifers that this thread is full of well-off people being very smug and full of themselves.
I'm willing to be persuaded but right now I feel I'll give this a miss.
Sorry but I don’t see the problem Prague. Your guess in by the 7th after which RobLee will compile a spreadsheet and post it up with everyone’s guess. In July we go again. There is nothing to stop discussion and opinions and offering advice as normal. It may have be nice for Rob to consult you but I think you are making a mountain out of a molehill, in my opinion.
Ok maybe it was partly the hangover talking. I think the bit about @Rob7Lee sending me his score for transparency reasons really made me uncomfortable that anyone would think it necessary. Looked to me like it was, or had become, less a “bit of fun” than I had seen it.
Regarding the time frame, one of the options I wanted to throw in was that it would be fun to mesure ourselves against pro pundits, especially as a group. This would need a 12 month span, but that would then be too long before the fun starts. However it could be done if we placed our 12 month predictions alongside the 6 month ones, and then the 12 month ones become de facto the prediction for the 2nd half. I thought that this might encourage everyone to think longer term like we who are into it always advise newer punters to do. But if there’s no appetite for that, there we are.
Either way, I hope people will share their thoughts about what drives their forecast, even if they dont give their actual figure. That was what I appreciated about the first two.
Looks like I missed a 'frank exchange of views' yesterday!
My two pen'th.
I like the idea of setting the 12 month target now but then also have quarterly targets. That would keep the interest throughout the year and allows people to adjust and not lose interest if they are way off. The 'gold star' should definitely go to the 12 month winner!
I think it should be a 'secret ballot' but published immediately on close of entries (end of this coming week?), not because I have a cynical view of people on here, just because group think inevitably steers the herd and you'll get a more interesting spread of views if it's 'blind'.
Last, the above doesn't preclude anyone from putting forward their views and rationale, before or after. I'll certainly be putting my views forward, just as soon as I've worked out what they are!
For sure I was hoping to hear what you thought before we set up this time.
In your set up above, if I understand correctly, the 12 month forecast would remain separate and unchanged, regardless of how people do in the 3 month? Don't you think 3 months is a bit short?
I take the point about avoiding herd mentality with a secret ballot, (although the person you send them to (@Rob7Lee) will have a tough time disengaging from that, not sure I could) so long as people still share their overall thoughts, which I think is where the whole thing adds some value beyond the competition element.
Yes re the 12 month running alongside the quarterlies.
Bit late now but Rob could have gone first and sent his number to you - which I think is what he was originally suggesting - but it's not that important.
Quarterly would fit in with the earnings cycle but it's not a big deal - 6 months is fine.
I'm looking forward to the views as I definitely made the mistake of over-analysing and over-trading last year.
I am only a lowly financial adviser & not a tax expert but it's my view that its the Estate that pays any IHT due, not the individual who receives the gift. Also, if it is the Estate who pays & the deceased owned a residential property then the IHT threshold is now £500,000......and doubled to £1m if the deceased was a widow(er) who had previously inherited their spouses Estate.I would speak to the solicitors / executors who would be in a better position to help.
"People you give gifts to will be charged Inheritance Tax if you give away more than £325,000 in the 7 years before your death."
The above link also gives some good examples of how it works/order etc. The reason bob and I have mentioned £325k is any gifts (one assumes) would not be the residential property, again link above explains. Plus the Property amount only applies on estates up to certain values and who the property is left to. If estate is more than £2m or you are leaving to anyone other than children/grandchildren you don't get the extra allowance anyway.
Question please for any inheritance tax specialists: If IHT is payable on a gift given less than 3 years before the death of person gifting, does the 40% IHT have to be paid by the gift recipient or from the deceased’s estate?
I’m sure I heard someone say that the length of gift before the 7 years affects the amount of IHT paid . No idea of the numbers but say that gift was received 6 years and 51 weeks before the death of the person gifting you wouldn’t get hit with 40% .
Yes theirs a taper relief as below;
less than 3
40%
3 to 4
32%
4 to 5
24%
5 to 6
16%
6 to 7
8%
7 or more
0%
So, yes, this is a real scenario I currently face. Here’s the whole picture:
My 81 year old dad is very unwell at the moment, suffering in DV Hospital with cancer, covid and now pneumonia which, as you can imagine, has brought this and other considerations to the fore. Basically, he ‘gifted’ me £215k in 2019 which paid off my mortgage and gave me money to renovate my home. To give you the whole picture, he owns a home in his own name worth £350k and lives with his partner there albeit they are not married as she is married to someone else and no divorce proceedings exist for them to get married. He has 2 separate bank account balances of £170,000 (total £340k) held in joint names with him and me and him and his partner all of which he had solely funded, not us. He (wrongly) thinks that IHT wouldn’t apply to half of those balances because they are in joint names.
Its also worth saying that I am both, as his sole descendent, the major beneficiary in his will but also the executor of his will.
It did appear to me, from looking at the government guidance on line, that I (the beneficiary of the £215k gift) am, currently, personally liable for 40% of the £215k in the event that we lost dad, so that would be £86,000. Given that the whole of the £215k has been ‘spent’ on the renovation and mortgage repayment, being personally liable for £86,000 IHT would effectively mean that I would have to take out a mortgage to pay the IHT - ironically almost exactly the balance paid off using dad’s gift money.
Additionally, I have been considering how much IHT would be payable on dad’s existing assets which, as detailed above, total £690,000. With him leaving me, his descendant, the house, it seems that IHT payable on dad’s assets, would be £76,000. That makes a total IHT bill of £162,000.
Do those of you with more experience of IHT matters and/or ‘in the know’ agree with my assessment of things?
Any guidance or suggestions would be welcomed. I am pretty sure that you will tell me that there’s not much that can be done other than continue to pray that dad comes through his illnesses such that the IHT payable on the ‘gift’ reduces as the years go by.
Over to you!
My understanding is that you are pretty much spot on with your understanding.
Your dad has £690k of assets, with a £325k allowance, the amount in question is £365k.
40% of that is £146k.
Best of luck for your dad, having to worry about finances at such a difficult time is really tough.
So onto the 2021 challenge/competition. What will the FTSE 100 be on 30th June 2021?
To make it a little more covert, rather than post up on here, if everyone sends me a private message with their prediction I'll spreadsheet it and when all votes are in i'll post up. Shall we say closing date a week today, 7th Jan?
So it's not see as i'm cheating i'll message mine to this years winner Prague.
As a reminder we ended 2020 @ 6,460.52 - will it go up, will it go down.
I'll also post up monthly the table as it stands.....
That Ok with everyone?
Will do need a couple more of days to plot & make my prediction, still smarting from last loss - cheers in advance #Rob7Lee
First day of trading always seems to be an agenda-setting day, because many traders took time off over the Christmas-NY time. At least, that's how it used to be. Anyway another agenda setting day looms on Wednesday. The US elections are not in fact over. The result of the Georgia Senate run-offs is crucial to defining how much Biden will actually be able to get done. Of course you can also read 'analysts" offering polar opposite market outcomes for a given result, and of course anything less than a 60-40 Democrat win will see Trump and his trolls demanding a recount; but either way I'm assuming that where the indices end this week will be more significant than where they open today..
So onto the 2021 challenge/competition. What will the FTSE 100 be on 30th June 2021?
To make it a little more covert, rather than post up on here, if everyone sends me a private message with their prediction I'll spreadsheet it and when all votes are in i'll post up. Shall we say closing date a week today, 7th Jan?
So it's not see as i'm cheating i'll message mine to this years winner Prague.
As a reminder we ended 2020 @ 6,460.52 - will it go up, will it go down.
I'll also post up monthly the table as it stands.....
That Ok with everyone?
Will do need a couple more of days to plot & make my prediction, still smarting from last loss - cheers in advance #Rob7Lee
So onto the 2021 challenge/competition. What will the FTSE 100 be on 30th June 2021?
To make it a little more covert, rather than post up on here, if everyone sends me a private message with their prediction I'll spreadsheet it and when all votes are in i'll post up. Shall we say closing date a week today, 7th Jan?
So it's not see as i'm cheating i'll message mine to this years winner Prague.
As a reminder we ended 2020 @ 6,460.52 - will it go up, will it go down.
I'll also post up monthly the table as it stands.....
That Ok with everyone?
Will do need a couple more of days to plot & make my prediction, still smarting from last loss - cheers in advance #Rob7Lee
I am only a lowly financial adviser & not a tax expert but it's my view that its the Estate that pays any IHT due, not the individual who receives the gift. Also, if it is the Estate who pays & the deceased owned a residential property then the IHT threshold is now £500,000......and doubled to £1m if the deceased was a widow(er) who had previously inherited their spouses Estate.I would speak to the solicitors / executors who would be in a better position to help.
"People you give gifts to will be charged Inheritance Tax if you give away more than £325,000 in the 7 years before your death."
The above link also gives some good examples of how it works/order etc. The reason bob and I have mentioned £325k is any gifts (one assumes) would not be the residential property, again link above explains. Plus the Property amount only applies on estates up to certain values and who the property is left to. If estate is more than £2m or you are leaving to anyone other than children/grandchildren you don't get the extra allowance anyway.
Question please for any inheritance tax specialists: If IHT is payable on a gift given less than 3 years before the death of person gifting, does the 40% IHT have to be paid by the gift recipient or from the deceased’s estate?
I’m sure I heard someone say that the length of gift before the 7 years affects the amount of IHT paid . No idea of the numbers but say that gift was received 6 years and 51 weeks before the death of the person gifting you wouldn’t get hit with 40% .
Yes theirs a taper relief as below;
less than 3
40%
3 to 4
32%
4 to 5
24%
5 to 6
16%
6 to 7
8%
7 or more
0%
So, yes, this is a real scenario I currently face. Here’s the whole picture:
My 81 year old dad is very unwell at the moment, suffering in DV Hospital with cancer, covid and now pneumonia which, as you can imagine, has brought this and other considerations to the fore. Basically, he ‘gifted’ me £215k in 2019 which paid off my mortgage and gave me money to renovate my home. To give you the whole picture, he owns a home in his own name worth £350k and lives with his partner there albeit they are not married as she is married to someone else and no divorce proceedings exist for them to get married. He has 2 separate bank account balances of £170,000 (total £340k) held in joint names with him and me and him and his partner all of which he had solely funded, not us. He (wrongly) thinks that IHT wouldn’t apply to half of those balances because they are in joint names.
Its also worth saying that I am both, as his sole descendent, the major beneficiary in his will but also the executor of his will.
It did appear to me, from looking at the government guidance on line, that I (the beneficiary of the £215k gift) am, currently, personally liable for 40% of the £215k in the event that we lost dad, so that would be £86,000. Given that the whole of the £215k has been ‘spent’ on the renovation and mortgage repayment, being personally liable for £86,000 IHT would effectively mean that I would have to take out a mortgage to pay the IHT - ironically almost exactly the balance paid off using dad’s gift money.
Additionally, I have been considering how much IHT would be payable on dad’s existing assets which, as detailed above, total £690,000. With him leaving me, his descendant, the house, it seems that IHT payable on dad’s assets, would be £76,000. That makes a total IHT bill of £162,000.
Do those of you with more experience of IHT matters and/or ‘in the know’ agree with my assessment of things?
Any guidance or suggestions would be welcomed. I am pretty sure that you will tell me that there’s not much that can be done other than continue to pray that dad comes through his illnesses such that the IHT payable on the ‘gift’ reduces as the years go by.
Over to you!
Apology, I missed this this morning, and firstly sorry to hear how unwell your dad is, fingers crossed he pulls through.
Yes you are correct in the main; the IHT limit is £325k however as he is leaving his home to you that will increase to £500k as you have indicated. HOWEVER, I think you may be wrong on Taper relief, Taper relief only applies when the gift/s exceed the £325k. Many people have been caught out on that.
As I read it;
1. You will personally owe 40% of the £215k i.e. £86,000. 2. The estate of £690k (£340k cash and £350k property) would incur an IHT charge of £190k x 40% i.e. £76,000.
In essence the entire estate is £905,000 and 40% tax is payable on £405,000 of that, split between you and the estate. What happened to your mum/his wife, did she pass and leave everything to your dad (if so when is important) or did they just spit up?
All that said, what has your dad left to whom (other than the house), as it may be possible I guess you will be inheriting enough cash to cover your £86k bill? But be aware you may have to pay the £86k before the other funds are released so may need a bridging loan in that instance.
Unfortunately I don't think there is much you can do, if he hasn't this year and last he can give away £3k for each of those two years to any individual and another £250 to any number of people (not the £3k recipient), but it's going to make very little difference to the overall.
This estate is one that the HMRC are prime to look into in greater detail, so make sure your paperwork is above board with the joint accounts and any spending that's happened. And as above, I feel you are wrong on Taper relief, it'll never apply unless he gifts more money to take the total gifts over £325k.
EDIT; I would check that your £215k isn't deemed as simply using up part of the allowance, it may do and only if it goes over £325k will it be payable by you.
Out of interest any thought on what will happen to his partner should your father pass away ? Will you turf her out or will you let her stay in the property ? Does she have any rights to stay there (like an interest in possession) ??
Just checked with my accountant. His view is that gifts prior to death are dealt with first, in that they use up the tax free amount first, therefore you would not have to pay any tax on the gift and the estate would have £285k tax free as the remaining amount of the limit. You would only become personally liable if the gift exceeded £325k and then you would have to pay tax on the amount above £325k. Phew!
Just checked with my accountant. His view is that gifts prior to death are dealt with first, in that they use up the tax free amount first, therefore you would not have to pay any tax on the gift and the estate would have £285k tax free as the remaining amount of the limit. You would only become personally liable if the gift exceeded £325k and then you would have to pay tax on the amount above £325k. Phew!
Thats great news for @meldrew66. It might be even better if his father can use a spouse's IHT NRB as well. Important to know about his mother as you said earlier.
Comments
@Rob7Lee advice seems to cover all the bases. When it comes to IFAs, I've been critical of them as an industry,largely due to my earliest experience with them. Once you've done the basic survey Rob suggests, that sounds like the time to get an IFA on the job. The IFA might suggest a re-structure, and that's what I got re my pensions some 14 years back, it was well worth it. However he then wanted to keep control of the investment activity on my SIPP (with ongoing fees) and I felt confident enough to do that myself, so we parted ways. You might not feel that way, or not for a while, but it's worth thinking about and splitting your agreement with the IFA on that basis. As for who, having read the irrascible old bastard for years on this thread, I'd say that in your shoes, I'd definitely be making @golfaddick your first point of call
Looks like I missed a 'frank exchange of views' yesterday!
My two pen'th.
I like the idea of setting the 12 month target now but then also have quarterly targets. That would keep the interest throughout the year and allows people to adjust and not lose interest if they are way off. The 'gold star' should definitely go to the 12 month winner!
I think it should be a 'secret ballot' but published immediately on close of entries (end of this coming week?), not because I have a cynical view of people on here, just because group think inevitably steers the herd and you'll get a more interesting spread of views if it's 'blind'.
Last, the above doesn't preclude anyone from putting forward their views and rationale, before or after. I'll certainly be putting my views forward, just as soon as I've worked out what they are!
Didn't know that. I lived in Bangkok hen I set my profile up but have been n Phuket for many years now.
In your set up above, if I understand correctly, the 12 month forecast would remain separate and unchanged, regardless of how people do in the 3 month? Don't you think 3 months is a bit short?
I take the point about avoiding herd mentality with a secret ballot, (although the person you send them to (@Rob7Lee) will have a tough time disengaging from that, not sure I could) so long as people still share their overall thoughts, which I think is where the whole thing adds some value beyond the competition element.
I think the best, easiest, quickest and most importantly way to avoid moaning, would be for everyone to say NOW where they think the year will end, and then to have a quarterly forecast.
So for example, now we give Dec 31, and March 31, then towards the end of march we give June 30, then June we give Sep, Sep we give a NEW December knowing what we do now. So effectively there will be 2 December competitions, one will be the quarterly and the other the "locked in" Dec 31 value.
This gives people who join this thread the opportunity to get involved in the quarterly forecasting.
That way you effectively have 2 decent games going at the same time.
Having fully read @WishIdStayedinthePub's post since I wrote this... Basically... What he said...
When I set my profile up I wasn't in the pub but wished I was. Plus ca change.
My 81 year old dad is very unwell at the moment, suffering in DV Hospital with cancer, covid and now pneumonia which, as you can imagine, has brought this and other considerations to the fore. Basically, he ‘gifted’ me £215k in 2019 which paid off my mortgage and gave me money to renovate my home. To give you the whole picture, he owns a home in his own name worth £350k and lives with his partner there albeit they are not married as she is married to someone else and no divorce proceedings exist for them to get married. He has 2 separate bank account balances of £170,000 (total £340k) held in joint names with him and me and him and his partner all of which he had solely funded, not us. He (wrongly) thinks that IHT wouldn’t apply to half of those balances because they are in joint names.
Its also worth saying that I am both, as his sole descendent, the major beneficiary in his will but also the executor of his will.
It did appear to me, from looking at the government guidance on line, that I (the beneficiary of the £215k gift) am, currently, personally liable for 40% of the £215k in the event that we lost dad, so that would be £86,000. Given that the whole of the £215k has been ‘spent’ on the renovation and mortgage repayment, being personally liable for £86,000 IHT would effectively mean that I would have to take out a mortgage to pay the IHT - ironically almost exactly the balance paid off using dad’s gift money.
Additionally, I have been considering how much IHT would be payable on dad’s existing assets which, as detailed above, total £690,000. With him leaving me, his descendant, the house, it seems that IHT payable on dad’s assets, would be £76,000. That makes a total IHT bill of £162,000.
Over to you!
Bit late now but Rob could have gone first and sent his number to you - which I think is what he was originally suggesting - but it's not that important.
Quarterly would fit in with the earnings cycle but it's not a big deal - 6 months is fine.
I'm looking forward to the views as I definitely made the mistake of over-analysing and over-trading last year.
Your dad has £690k of assets, with a £325k allowance, the amount in question is £365k.
40% of that is £146k.
Best of luck for your dad, having to worry about finances at such a difficult time is really tough.
Yes you are correct in the main; the IHT limit is £325k however as he is leaving his home to you that will increase to £500k as you have indicated. HOWEVER, I think you may be wrong on Taper relief, Taper relief only applies when the gift/s exceed the £325k. Many people have been caught out on that.
As I read it;
1. You will personally owe 40% of the £215k i.e. £86,000.
2. The estate of £690k (£340k cash and £350k property) would incur an IHT charge of £190k x 40% i.e. £76,000.
In essence the entire estate is £905,000 and 40% tax is payable on £405,000 of that, split between you and the estate. What happened to your mum/his wife, did she pass and leave everything to your dad (if so when is important) or did they just spit up?
All that said, what has your dad left to whom (other than the house), as it may be possible I guess you will be inheriting enough cash to cover your £86k bill? But be aware you may have to pay the £86k before the other funds are released so may need a bridging loan in that instance.
Unfortunately I don't think there is much you can do, if he hasn't this year and last he can give away £3k for each of those two years to any individual and another £250 to any number of people (not the £3k recipient), but it's going to make very little difference to the overall.
This estate is one that the HMRC are prime to look into in greater detail, so make sure your paperwork is above board with the joint accounts and any spending that's happened. And as above, I feel you are wrong on Taper relief, it'll never apply unless he gifts more money to take the total gifts over £325k.
EDIT; I would check that your £215k isn't deemed as simply using up part of the allowance, it may do and only if it goes over £325k will it be payable by you.
Just checked with my accountant. His view is that gifts prior to death are dealt with first, in that they use up the tax free amount first, therefore you would not have to pay any tax on the gift and the estate would have £285k tax free as the remaining amount of the limit. You would only become personally liable if the gift exceeded £325k and then you would have to pay tax on the amount above £325k. Phew!
There may well be a bounce but difficult to see this as anything other than directional for US markets ....