I was listening to a webinar by a fund manager yesterday & a question came up about Bitcoins & why wasn't his firm investing in them. All he said is that its a bubble.....and bubbles burst. It's the next thing now that multi-level marketing has been found out.
If you have a moment take a look at the Crypto thread, where I posted, trying to get them to explain what exactly it is you buy, when you buy a token such as Vechain (I did in 2018, having being persuaded that "it" had a real-world use). @kentaddick at least replied, albeit with one sentence, and I really appreciate his efforts generally and the assistance he offers to me and others. The rest simply blanked me and carried on jabbering excitedly about Zil, which as far as I'm concerned is an old Soviet limousine. Now nobody has a divine right to get an answer on CL but I don't think I was at all rude. I just seemingly didn't Believe enough. That thread now looks to me dangerously like a cult.
I was listening to a webinar by a fund manager yesterday & a question came up about Bitcoins & why wasn't his firm investing in them. All he said is that its a bubble.....and bubbles burst. It's the next thing now that multi-level marketing has been found out.
If you have a moment take a look at the Crypto thread, where I posted, trying to get them to explain what exactly it is you buy, when you buy a token such as Vechain (I did in 2018, having being persuaded that "it" had a real-world use). @kentaddick at least replied, albeit with one sentence, and I really appreciate his efforts generally and the assistance he offers to me and others. The rest simply blanked me and carried on jabbering excitedly about Zil, which as far as I'm concerned is an old Soviet limousine. Now nobody has a divine right to get an answer on CL but I don't think I was at all rude. I just seemingly didn't Believe enough. That thread now looks to me dangerously like a cult.
You ask questions mate, I answer them and then you disappear, and then @ me on this thread claiming I’m in a cult, so yeah I’d rate that as being a bit rude now. You asked how do you know that products are being used, and I told you you can literally see it all on the ledger. It’s all public and you can look at it yourself.
I’m happy to admit there will be a big downturn in the next 6-12 months that will continue for a couple of years afterwards. But that’s literally the cycle. The market is a lot more mature than 3 years ago. There are products out there that are built for volatility now.
I was listening to a webinar by a fund manager yesterday & a question came up about Bitcoins & why wasn't his firm investing in them. All he said is that its a bubble.....and bubbles burst. It's the next thing now that multi-level marketing has been found out.
Zzzz it was a bubble 3 years ago, apparently and it would all go away. Tulip bulbs we were told. There’s far more products out there now. Defi is the game changer this bull run.
Hi @kentaddick. I'm sorry that what I wrote made you feel that way. I did not know how to describe what I see there without acknowledging that you - and only you - answered me. I appreciate all your efforts to reply to everybody, and wrote that above. However I didn't disappear. I came back and explained that I didn't think that you'd answered my question - but at least you tried. No one else waded in, even to tell me what a thick idiot I am for not understanding xyz, and it is that, that makes me think it's all a bit weird. Even if I could find out how to look at the ledger I don't understand how it would tell me:
- what I own, when I own a Vechain token (as opposed to a Unilever or Google ordinary share) - when a company, such as IBM "uses" Vechain, how does it access it, is something installed, who installs it, and most of all how and how much does IBM pay Vechain for this? - Vechain is apparently not for profit. Fine. neither is Tesla, apparently. But Tesla rakes in revenue by selling cars. As a result its share price goes up. What would make Vechain token price go up, if not the revenue coming in? And if it is the revenue, why can I not find out a single thing about what it sells and to whom?
And of course Vechain is just one example. What about all those other weird and wonderful names they are all jabbering on about? Like Zil. What is Zil? (same questions as for Vechain). I don't remotely take it personally that my questions were blanked other than by you. But I think it's very telling, and a big red flag for anyone else tempted to get in without having the answers to such questions.
As for bubble, it seems to keep bursting and being inflated again!
Must have been about 4-5 years ago I bought some, can't even remember now the price but I made about 50% in a couple of months (we're talking hundreds of pounds invested not thousands). I saw it rise 2/3 fold very soon after, slap face time, only to see it go back to below what I bought at within a year, of course now it's back up to 3x. Talk about roller coaster.
I look at the chart sometimes, take the last week, as high as nearly 42k and as low as 30k, or the last month it at one pint had more than doubled since mid December and thats before I try to understand like Richard what on earth it is i'm buying!
I'm sure many have and will get rich and I suspect many will also lose fortunes.
Zynex up 11% today on news of filing a sepsis monitor patent. I'm back in the black
Some trading results out yesterday which sounded positive. Saw a direct tweet from Thomas but can't seem to pick up any 'news' on the feeds to get into the detail and to what extent they are back on track. My holding up 21%.
I've taken a small punt in Helium One who are due to drill for Helium reserves in Tanzania. Plenty of demand for the stuff assuming the reserves can be accessed.
As for bubble, it seems to keep bursting and being inflated again!
Must have been about 4-5 years ago I bought some, can't even remember now the price but I made about 50% in a couple of months (we're talking hundreds of pounds invested not thousands). I saw it rise 2/3 fold very soon after, slap face time, only to see it go back to below what I bought at within a year, of course now it's back up to 3x. Talk about roller coaster.
I look at the chart sometimes, take the last week, as high as nearly 42k and as low as 30k, or the last month it at one pint had more than doubled since mid December and thats before I try to understand like Richard what on earth it is i'm buying!
I'm sure many have and will get rich and I suspect many will also lose fortunes.
I don't understand it either & I've always said that I'd never advise clients on something that I struggle to get my head round.
I've also said that until fund management groups such as Baillie Gifford, JP Morgan, Schroders etc start investing in them & you can clearly see them in their fund holdings then I'll keep clear. Call me a dinosaur but I'd rather trust the above fund managers (who seem to know their onions) to a bunch of faceless individuals hiding behind the internet.
Inheritance Tax advice please on the following scenario:
1. My dad funded the £76,000 purchase of a property abroad in 2010 that was registered in our joint names. 2. In 2011, for convenience purposes, the property was transferred into my sole name. Effectively, he ‘gifted’ me the property abroad when he removed his name from the title deeds 3. I sold the property for £90000 in 2014.
4. I paid dad back £85,000 representing his funds and a share of the profit 5. In 2019 dad ‘gifted me’ £215k
Dad’s not well now and may not make it. The implications of this and other assets held means that we will be liable for 40% inheritance tax on the £215k gift.
So...................I am thinking that maybe I could argue with the tax man that the £85k I paid dad was an interest free loan and that he, effectively repaid me as part of the £215k he gave me in 2019. On the basis that the asset sold was in my sole name, do you think that would be a reasonable story to justify excluding £85k from the £215k when calculating what is and isn’t subject to inheritance tax?
What do you guys ‘in the know’ think of my chances of winning that argument with HMRC?
Inheritance Tax advice please on the following scenario:
1. My dad funded the £76,000 purchase of a property abroad in 2010 that was registered in our joint names. 2. In 2011, for convenience purposes, the property was transferred into my sole name. Effectively, he ‘gifted’ me the property abroad when he removed his name from the title deeds 3. I sold the property for £90000 in 2014.
4. I paid dad back £85,000 representing his funds and a share of the profit 5. In 2019 dad ‘gifted me’ £215k
Dad’s not well now and may not make it. The implications of this and other assets held means that we will be liable for 40% inheritance tax on the £215k gift.
So...................I am thinking that maybe I could argue with the tax man that the £85k I paid dad was an interest free loan and that he, effectively repaid me as part of the £215k he gave me in 2019. On the basis that the asset sold was in my sole name, do you think that would be a reasonable story to justify excluding £85k from the £215k when calculating what is and isn’t subject to inheritance tax?
What do you guys ‘in the know’ think of my chances of winning that argument with HMRC?
I'm not a tax expert but the first thing to establish is what tax you paid on any profit from the sale of that property, assuming it wasn't your primary home.
There may then be tax implications of the money you gave to your dad? If it was a loan, I would have thought that you need documentation from the time to back that up and then there would at least be a benefit in kind consideration for that loan (I may have this all wrong but I'm fairly sure, bar the 3,500 rule and certain other specific situations, you can only transfer sums between spouses without income tax implications).
You may want to clarify all that with a tax advisor before contacting HMRC and getting clobbered with more than IHT.
Inheritance Tax advice please on the following scenario:
1. My dad funded the £76,000 purchase of a property abroad in 2010 that was registered in our joint names. 2. In 2011, for convenience purposes, the property was transferred into my sole name. Effectively, he ‘gifted’ me the property abroad when he removed his name from the title deeds 3. I sold the property for £90000 in 2014.
4. I paid dad back £85,000 representing his funds and a share of the profit 5. In 2019 dad ‘gifted me’ £215k
Dad’s not well now and may not make it. The implications of this and other assets held means that we will be liable for 40% inheritance tax on the £215k gift.
So...................I am thinking that maybe I could argue with the tax man that the £85k I paid dad was an interest free loan and that he, effectively repaid me as part of the £215k he gave me in 2019. On the basis that the asset sold was in my sole name, do you think that would be a reasonable story to justify excluding £85k from the £215k when calculating what is and isn’t subject to inheritance tax?
What do you guys ‘in the know’ think of my chances of winning that argument with HMRC?
Ignore this just googled it and realised my initial comment was stupid
Inheritance Tax advice please on the following scenario:
1. My dad funded the £76,000 purchase of a property abroad in 2010 that was registered in our joint names. 2. In 2011, for convenience purposes, the property was transferred into my sole name. Effectively, he ‘gifted’ me the property abroad when he removed his name from the title deeds 3. I sold the property for £90000 in 2014.
4. I paid dad back £85,000 representing his funds and a share of the profit 5. In 2019 dad ‘gifted me’ £215k
Dad’s not well now and may not make it. The implications of this and other assets held means that we will be liable for 40% inheritance tax on the £215k gift.
So...................I am thinking that maybe I could argue with the tax man that the £85k I paid dad was an interest free loan and that he, effectively repaid me as part of the £215k he gave me in 2019. On the basis that the asset sold was in my sole name, do you think that would be a reasonable story to justify excluding £85k from the £215k when calculating what is and isn’t subject to inheritance tax?
What do you guys ‘in the know’ think of my chances of winning that argument with HMRC?
Firstly, sorry to hear about your Dad.
TBH I think you are clutching straws. What if they ask for the proof of the loan to you in the first place? I worked for a bank some years ago and it wasn't 'that' unusual for HMRC to ask for banking transactions for way past 10 years.
What if they ask how you funded the purchase in the first place? Or proof of him loaning you the money?
If nothing else your father needs to gift you (or someone else) £3k now and £3k for last tax year (assuming he hasn't already) and if possible a fair number of £250 gifts to other individuals. Any children/Grandchildren got married recently?
IHT can feel barbaric and annoying, but sadly it is the rules, minimise it as much as you can now, but trying to make up stories about cash flow in the past is only going to put you in hot water at a time you really won't need the hassle.
Think you just need to accept the tax man will be owed some money, but within the rules minimise that as much as humanly possible, you'll still get £500k (inc house allowance) and 60% above that.
Hi @kentaddick. I'm sorry that what I wrote made you feel that way. I did not know how to describe what I see there without acknowledging that you - and only you - answered me. I appreciate all your efforts to reply to everybody, and wrote that above. However I didn't disappear. I came back and explained that I didn't think that you'd answered my question - but at least you tried. No one else waded in, even to tell me what a thick idiot I am for not understanding xyz, and it is that, that makes me think it's all a bit weird. Even if I could find out how to look at the ledger I don't understand how it would tell me:
- what I own, when I own a Vechain token (as opposed to a Unilever or Google ordinary share) - when a company, such as IBM "uses" Vechain, how does it access it, is something installed, who installs it, and most of all how and how much does IBM pay Vechain for this? - Vechain is apparently not for profit. Fine. neither is Tesla, apparently. But Tesla rakes in revenue by selling cars. As a result its share price goes up. What would make Vechain token price go up, if not the revenue coming in? And if it is the revenue, why can I not find out a single thing about what it sells and to whom?
And of course Vechain is just one example. What about all those other weird and wonderful names they are all jabbering on about? Like Zil. What is Zil? (same questions as for Vechain). I don't remotely take it personally that my questions were blanked other than by you. But I think it's very telling, and a big red flag for anyone else tempted to get in without having the answers to such questions.
Inheritance Tax advice please on the following scenario:
1. My dad funded the £76,000 purchase of a property abroad in 2010 that was registered in our joint names. 2. In 2011, for convenience purposes, the property was transferred into my sole name. Effectively, he ‘gifted’ me the property abroad when he removed his name from the title deeds 3. I sold the property for £90000 in 2014.
4. I paid dad back £85,000 representing his funds and a share of the profit 5. In 2019 dad ‘gifted me’ £215k
Dad’s not well now and may not make it. The implications of this and other assets held means that we will be liable for 40% inheritance tax on the £215k gift.
So...................I am thinking that maybe I could argue with the tax man that the £85k I paid dad was an interest free loan and that he, effectively repaid me as part of the £215k he gave me in 2019. On the basis that the asset sold was in my sole name, do you think that would be a reasonable story to justify excluding £85k from the £215k when calculating what is and isn’t subject to inheritance tax?
What do you guys ‘in the know’ think of my chances of winning that argument with HMRC?.
First thing I will ask is have you spoken to a solicitor yet ? I remember your post from 2 weeks ago & @Rob7Lee gave you some very helpful advice then. I think you have greater problems than tax on the "gift" if your dads partner still has access to his £170k.
As for the "gift" itself. I don't think you'll get anywhere with HMRC over the return of the loan to your father a few years ago. Did you pay tax on the property gain, if not then you might have more to lose on all this & as @Rob7Lee points out, they will certainly look into ALL aspects of the payments between you & your father over the past 10 years.
This is very good - Henry Mance in the FT always is. Hope everyone has heard the story he starts with. It's bona fide, the guy did an interview on the BBC last week...
Let me explain my reaction to the news that a San Francisco-based programmer has around $220m in bitcoin, but cannot remember the password. According to the New York Times, Stefan Thomas has only two more guesses to access the keys to a digital wallet that contains his fortune. Otherwise he loses the lot. I think there was a brief moment when I found it hilarious. Then I found it too painful to think about. Now I have reached a state of acceptance. This is the kind of Sliding Doors moment that we all fear — what if we never met our partner, what if we took that plane, what (in my case) if I had slipped jumping from a ledge into a rock pool. Life could have been so different. Accidents do happen, especially to bitcoin investors. An estimated 20 per cent of the digital currency is stranded — owned, for example, by people who can’t remember how to access it. I thought these guys were against the right to be forgotten?
A Financial Times colleague wisely wrote down the passphrase to his bitcoin, now worth a few thousand pounds. Sadly he wrote it down wrong. As long as he doesn’t write things down wrong in the FT, he’ll be fine. But other forgetful bitcoiners will bang their heads against their Tesla prospectuses, because the dollar value of their currency has more than tripled in the past year. A Welsh IT worker claims he binned a laptop with £230m of bitcoin, and has spent eight years asking the council for permission to search its landfill. There are serious implications for bitcoin, which wants to be a store of value, but is clearly overemphasising the storing part. Remember that it is the most environmentally damaging currency imaginable, with a carbon footprint bigger than Sri Lanka, because of the computing power required to create each token. If Silicon Valley wanted to pollute the world while creating nothing of usable value, it should have copied Northern Ireland’s cash-for-ash scheme. There are broader lessons for digital evangelists. Internet libertarians envisage that people will flourish when the regulatory guardrails are thrown off and inefficient humans are replaced by automated systems. But what if humans are quite useful? Walk in beaten and empty-handed to a bank branch, and the tellers will find a way to reconnect you with your overdraft. Whereas, even if you could identify bitcoin’s mysterious founder Satoshi Nakamoto, he couldn’t help you access your digital wallet. For a species that forgets things, that is suboptimal.
The other lesson is about genius. Silicon Valley loves a genius, often identified by how early they invested in X or what employee number they were in Y. But maybe the people who invested early in Facebook weren’t geniuses — they were just lucky. Maybe the people who become viral stars are not the funniest or the best singers. Password-amnesiac Mr Thomas was given his 7,002 bitcoin for making a video — a task millions of people could have done. He could be worth as much as Ed Sheeran or become the internet’s version of the Fifth Beatle. But it wouldn’t say much about his ability or contribution to society. “If you can make one heap of all your winnings / And risk it on one turn of pitch-and-toss / And lose, and start again at your beginnings / And never breathe a word about your loss . . . ,” wrote Rudyard Kipling. No one can really follow that advice. No one can treat triumph and disaster the same, even though luck often decides which we end up with. All we can do is have compassion for those people who never made their fortune, who never fell in love, who fell ill. Four years of Donald Trump has surely taught America that wealth does not correlate with moral status. If bitcoin teaches Silicon Valley the importance of luck, then maybe it will have created real value after all.
This is very good - Henry Mance in the FT always is. Hope everyone has heard the story he starts with. It's bona fide, the guy did an interview on the BBC last week...
Let me explain my reaction to the news that a San Francisco-based programmer has around $220m in bitcoin, but cannot remember the password. According to the New York Times, Stefan Thomas has only two more guesses to access the keys to a digital wallet that contains his fortune. Otherwise he loses the lot. I think there was a brief moment when I found it hilarious. Then I found it too painful to think about. Now I have reached a state of acceptance. This is the kind of Sliding Doors moment that we all fear — what if we never met our partner, what if we took that plane, what (in my case) if I had slipped jumping from a ledge into a rock pool. Life could have been so different. Accidents do happen, especially to bitcoin investors. An estimated 20 per cent of the digital currency is stranded — owned, for example, by people who can’t remember how to access it. I thought these guys were against the right to be forgotten?
A Financial Times colleague wisely wrote down the passphrase to his bitcoin, now worth a few thousand pounds. Sadly he wrote it down wrong. As long as he doesn’t write things down wrong in the FT, he’ll be fine. But other forgetful bitcoiners will bang their heads against their Tesla prospectuses, because the dollar value of their currency has more than tripled in the past year. A Welsh IT worker claims he binned a laptop with £230m of bitcoin, and has spent eight years asking the council for permission to search its landfill. There are serious implications for bitcoin, which wants to be a store of value, but is clearly overemphasising the storing part. Remember that it is the most environmentally damaging currency imaginable, with a carbon footprint bigger than Sri Lanka, because of the computing power required to create each token. If Silicon Valley wanted to pollute the world while creating nothing of usable value, it should have copied Northern Ireland’s cash-for-ash scheme. There are broader lessons for digital evangelists. Internet libertarians envisage that people will flourish when the regulatory guardrails are thrown off and inefficient humans are replaced by automated systems. But what if humans are quite useful? Walk in beaten and empty-handed to a bank branch, and the tellers will find a way to reconnect you with your overdraft. Whereas, even if you could identify bitcoin’s mysterious founder Satoshi Nakamoto, he couldn’t help you access your digital wallet. For a species that forgets things, that is suboptimal.
The other lesson is about genius. Silicon Valley loves a genius, often identified by how early they invested in X or what employee number they were in Y. But maybe the people who invested early in Facebook weren’t geniuses — they were just lucky. Maybe the people who become viral stars are not the funniest or the best singers. Password-amnesiac Mr Thomas was given his 7,002 bitcoin for making a video — a task millions of people could have done. He could be worth as much as Ed Sheeran or become the internet’s version of the Fifth Beatle. But it wouldn’t say much about his ability or contribution to society. “If you can make one heap of all your winnings / And risk it on one turn of pitch-and-toss / And lose, and start again at your beginnings / And never breathe a word about your loss . . . ,” wrote Rudyard Kipling. No one can really follow that advice. No one can treat triumph and disaster the same, even though luck often decides which we end up with. All we can do is have compassion for those people who never made their fortune, who never fell in love, who fell ill. Four years of Donald Trump has surely taught America that wealth does not correlate with moral status. If bitcoin teaches Silicon Valley the importance of luck, then maybe it will have created real value after all.
Very interesting, thanks for posting that.
Whilst not wanting this thread to turn into a crypto thread, that was incredibly interesting to read.
Having the carbon footprint of Sri Lanka is unbelievable, and disgraceful... A mate who is now obsessed by crypto, and who I would very kindly describe as being void of braincells, sent me a video of someone who had put all of the processors inside a radiator frame, so the bitcoin miner was basically being used as a radiator for their home!
In his case, he got into crypto because he bought too much bitcoin when buying an ounce of cannabis, and saw the value rocket.
Almost everyone I have seen get into crypto has absolutely no finance intelligence or background, which is probably why they have invented their own language (like a cult, your point which I completely agree with).
It is a market where people basically follow the crowd. Once it starts falling, it is going to massively tumble, and then when it rises, as we have seen, it will rocket.
Any "currency" that goes up or down at the rate it does, will never be able to be a practical currency in reality. Everyone who "holds" bitcoin becomes a huge speculator, and that is not appealing.
I get worried enough where I work about our FX exposure risk which could swing our profitability by 3-4%. Crypto could swing it by hundreds of percent.
Drugs, guns, and speculation, not a credible currency.
Inheritance Tax advice please on the following scenario:
1. My dad funded the £76,000 purchase of a property abroad in 2010 that was registered in our joint names. 2. In 2011, for convenience purposes, the property was transferred into my sole name. Effectively, he ‘gifted’ me the property abroad when he removed his name from the title deeds 3. I sold the property for £90000 in 2014.
4. I paid dad back £85,000 representing his funds and a share of the profit 5. In 2019 dad ‘gifted me’ £215k
Dad’s not well now and may not make it. The implications of this and other assets held means that we will be liable for 40% inheritance tax on the £215k gift.
So...................I am thinking that maybe I could argue with the tax man that the £85k I paid dad was an interest free loan and that he, effectively repaid me as part of the £215k he gave me in 2019. On the basis that the asset sold was in my sole name, do you think that would be a reasonable story to justify excluding £85k from the £215k when calculating what is and isn’t subject to inheritance tax?
What do you guys ‘in the know’ think of my chances of winning that argument with HMRC?.
First thing I will ask is have you spoken to a solicitor yet ? I remember your post from 2 weeks ago & @Rob7Lee gave you some very helpful advice then. I think you have greater problems than tax on the "gift" if your dads partner still has access to his £170k.
As for the "gift" itself. I don't think you'll get anywhere with HMRC over the return of the loan to your father a few years ago. Did you pay tax on the property gain, if not then you might have more to lose on all this & as @Rob7Lee points out, they will certainly look into ALL aspects of the payments between you & your father over the past 10 years.
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.
yes and no, sorry I typed quickly as in a meeting.
Although it's good news from a personal IHT liability, it is bad news in that the taper relief @meldrew66 thinks he will potentially benefit he will never do so all the time the gift is below £325k. It will only ever use up part of the tax free allowance and never get any taper relief i'm afraid.........
Thanks Rob and Golfie. Really useful comments and clarification. Not sure I fully understand what you mean about not getting taper relief on the £215k gift monies.
To answer your question, mum and dad divorced 50 years ago so dad's assets really are his own. Dad's will leaves me everything apart from small cash gifts to some of his mates. His home is the tricky issue whereby he is leaving it tome on his will but with a clause that his current partner can live there for the rest of her life. She is only 58 so is highly likely to outlive me.
Christ knows what the practical and financial implications are from that scenario! Sounds like I become a landlord of a rent free tenant.
One other question: can I, as executor of the will, use the £170k in dad's joint account with his partner to pay the £162k potential IHT bill when the time comes? As you can imagine, I'd rather use 'her' balance rather than 'mine'. What do you think?
Sounds like my scenario is on the complicated scale somewhat and will be tricky to manage without legal advice.
Inheritance Tax advice please on the following scenario:
1. My dad funded the £76,000 purchase of a property abroad in 2010 that was registered in our joint names. 2. In 2011, for convenience purposes, the property was transferred into my sole name. Effectively, he ‘gifted’ me the property abroad when he removed his name from the title deeds 3. I sold the property for £90000 in 2014.
4. I paid dad back £85,000 representing his funds and a share of the profit 5. In 2019 dad ‘gifted me’ £215k
Dad’s not well now and may not make it. The implications of this and other assets held means that we will be liable for 40% inheritance tax on the £215k gift.
So...................I am thinking that maybe I could argue with the tax man that the £85k I paid dad was an interest free loan and that he, effectively repaid me as part of the £215k he gave me in 2019. On the basis that the asset sold was in my sole name, do you think that would be a reasonable story to justify excluding £85k from the £215k when calculating what is and isn’t subject to inheritance tax?
What do you guys ‘in the know’ think of my chances of winning that argument with HMRC?.
First thing I will ask is have you spoken to a solicitor yet ? I remember your post from 2 weeks ago & @Rob7Lee gave you some very helpful advice then. I think you have greater problems than tax on the "gift" if your dads partner still has access to his £170k.
As for the "gift" itself. I don't think you'll get anywhere with HMRC over the return of the loan to your father a few years ago. Did you pay tax on the property gain, if not then you might have more to lose on all this & as @Rob7Lee points out, they will certainly look into ALL aspects of the payments between you & your father over the past 10 years.
Inheritance Tax advice please on the following scenario:
1. My dad funded the £76,000 purchase of a property abroad in 2010 that was registered in our joint names. 2. In 2011, for convenience purposes, the property was transferred into my sole name. Effectively, he ‘gifted’ me the property abroad when he removed his name from the title deeds 3. I sold the property for £90000 in 2014.
4. I paid dad back £85,000 representing his funds and a share of the profit 5. In 2019 dad ‘gifted me’ £215k
Dad’s not well now and may not make it. The implications of this and other assets held means that we will be liable for 40% inheritance tax on the £215k gift.
So...................I am thinking that maybe I could argue with the tax man that the £85k I paid dad was an interest free loan and that he, effectively repaid me as part of the £215k he gave me in 2019. On the basis that the asset sold was in my sole name, do you think that would be a reasonable story to justify excluding £85k from the £215k when calculating what is and isn’t subject to inheritance tax?
What do you guys ‘in the know’ think of my chances of winning that argument with HMRC?.
First thing I will ask is have you spoken to a solicitor yet ? I remember your post from 2 weeks ago & @Rob7Lee gave you some very helpful advice then. I think you have greater problems than tax on the "gift" if your dads partner still has access to his £170k.
As for the "gift" itself. I don't think you'll get anywhere with HMRC over the return of the loan to your father a few years ago. Did you pay tax on the property gain, if not then you might have more to lose on all this & as @Rob7Lee points out, they will certainly look into ALL aspects of the payments between you & your father over the past 10 years.
Hi Golfie. Well, since my last post, I haven’t spoken to a solicitor yet but I have found out that dad has just rewritten his will and I’ve found out more about the exact value and whereabouts of dad’s assets which is as follows:
1. £82k held in a joint account with dad and me 2. £236k held in joint names with dad and his partner 3. £38k held in dads sole name 4. Dad has £25k in PSBs and shares 5. Dad has ‘gifted’ his partner £30k which is in her sole account now 5. House valued at £350k 6. £215k ‘gift’ was made to me in 2019.
Total value of assets potentially subject to IHT: £976k
Will Update: The new will leaves the house to me and his partner jointly with her having a right to live there all of her life. The rest of dad’s ‘residual assets’ are to be shared equally between his partner and I.
So, I calculate inheritance tax to be as follows:
£976k less £325k allowance = £651k @ 40% = £264k
Absolutely gutted that we are throwing away £70k of IHT benefit by dad not leaving the house to me as his descendent because, effectively, he and his partner don’t want to risk that I won’t add her name to the deeds after the event.
His partner understands that the money in her sole and joint accounts will need to be used to pay the inheritance tax bill so that she can then live in the property. If you add my £82k and dads £38k to her total of £266k plus the liquid assets of £25k, that makes it £411k less £264k IHT, leaving £147k to be split 50/50 = £73.5k each. From that, £15k has been bequested to friends. That means just £132k to share each; £66k each.
I’ve made it clear to her that IHT has to be paid before any bequests can be made. If she refuses to stump up her cash to pay IHT then I have explained that the house would have to be sold to pay the IHT.
Rob/Golfie/Huskaris: is that how you see it too? Can you see any way we can reduce the IHT and still protect dad’s partner’s right to live in the house for the rest of her days? Is there any point in me seeing a solicitor or IFA?
Inheritance Tax advice please on the following scenario:
1. My dad funded the £76,000 purchase of a property abroad in 2010 that was registered in our joint names. 2. In 2011, for convenience purposes, the property was transferred into my sole name. Effectively, he ‘gifted’ me the property abroad when he removed his name from the title deeds 3. I sold the property for £90000 in 2014.
4. I paid dad back £85,000 representing his funds and a share of the profit 5. In 2019 dad ‘gifted me’ £215k
Dad’s not well now and may not make it. The implications of this and other assets held means that we will be liable for 40% inheritance tax on the £215k gift.
So...................I am thinking that maybe I could argue with the tax man that the £85k I paid dad was an interest free loan and that he, effectively repaid me as part of the £215k he gave me in 2019. On the basis that the asset sold was in my sole name, do you think that would be a reasonable story to justify excluding £85k from the £215k when calculating what is and isn’t subject to inheritance tax?
What do you guys ‘in the know’ think of my chances of winning that argument with HMRC?.
First thing I will ask is have you spoken to a solicitor yet ? I remember your post from 2 weeks ago & @Rob7Lee gave you some very helpful advice then. I think you have greater problems than tax on the "gift" if your dads partner still has access to his £170k.
As for the "gift" itself. I don't think you'll get anywhere with HMRC over the return of the loan to your father a few years ago. Did you pay tax on the property gain, if not then you might have more to lose on all this & as @Rob7Lee points out, they will certainly look into ALL aspects of the payments between you & your father over the past 10 years.
Inheritance Tax advice please on the following scenario:
1. My dad funded the £76,000 purchase of a property abroad in 2010 that was registered in our joint names. 2. In 2011, for convenience purposes, the property was transferred into my sole name. Effectively, he ‘gifted’ me the property abroad when he removed his name from the title deeds 3. I sold the property for £90000 in 2014.
4. I paid dad back £85,000 representing his funds and a share of the profit 5. In 2019 dad ‘gifted me’ £215k
Dad’s not well now and may not make it. The implications of this and other assets held means that we will be liable for 40% inheritance tax on the £215k gift.
So...................I am thinking that maybe I could argue with the tax man that the £85k I paid dad was an interest free loan and that he, effectively repaid me as part of the £215k he gave me in 2019. On the basis that the asset sold was in my sole name, do you think that would be a reasonable story to justify excluding £85k from the £215k when calculating what is and isn’t subject to inheritance tax?
What do you guys ‘in the know’ think of my chances of winning that argument with HMRC?.
First thing I will ask is have you spoken to a solicitor yet ? I remember your post from 2 weeks ago & @Rob7Lee gave you some very helpful advice then. I think you have greater problems than tax on the "gift" if your dads partner still has access to his £170k.
As for the "gift" itself. I don't think you'll get anywhere with HMRC over the return of the loan to your father a few years ago. Did you pay tax on the property gain, if not then you might have more to lose on all this & as @Rob7Lee points out, they will certainly look into ALL aspects of the payments between you & your father over the past 10 years.
Hi Golfie. Well, since my last post, I haven’t spoken to a solicitor yet but I have found out that dad has just rewritten his will and I’ve found out more about the exact value and whereabouts of dad’s assets which is as follows:
1. £82k held in a joint account with dad and me 2. £236k held in joint names with dad and his partner 3. £38k held in dads sole name 4. Dad has £25k in PSBs and shares 5. Dad has ‘gifted’ his partner £30k which is in her sole account now 5. House valued at £350k 6. £215k ‘gift’ was made to me in 2019.
Total value of assets potentially subject to IHT: £976k
Will Update: The new will leaves the house to me and his partner jointly with her having a right to live there all of her life. The rest of dad’s ‘residual assets’ are to be shared equally between his partner and I.
So, I calculate inheritance tax to be as follows:
£976k less £325k allowance = £651k @ 40% = £264k
Absolutely gutted that we are throwing away £70k of IHT benefit by dad not leaving the house to me as his descendent because, effectively, he and his partner don’t want to risk that I won’t add her name to the deeds after the event.
His partner understands that the money in her sole and joint accounts will need to be used to pay the inheritance tax bill so that she can then live in the property. If you add my £82k to her total of £266k plus the liquid assets of £25k, that makes it £374k less £264k IHT, leaving £110k to be split 50/50 = £55k each. From that, £15k has been bequested to friends. That means just £95k to share each; £47.5k each.
I’ve made it clear to her that IHT has to be paid before any bequests can be made. If she refuses to stump up her cash to pay IHT then I have explained that the house would have to be sold to pay the IHT.
Rob/Golfie/Huskaris: is that how you see it too? Can you see any way we can reduce the IHT and still protect dad’s partner’s right to live in the house for the rest of her days? Is there any point in me seeing a solicitor or IFA?
Hey Meldrew.
Firstly, I hope that everything is going as well for you as it can be.
On inheritance tax, I would recommend you look at the following:
"Under the rules, if you're passing your home to a direct descendant, you can benefit from an additional £175,000 in tax-free allowance in the 2020-21 tax year, up from the £150,000 allowance in 2019-20. The allowance only applies if you leave your home to a direct descendant – either a child or grandchild. Nieces and nephews, or friends, for example do not qualify."
I would hope that this would mean that your new IHT allowance is actually £500k due to the house being passed down to you. I would be interested to see other people's thoughts on this....
It would change the amount to £976k-£500k = £476k @ 40% = £190.4k.
In effect, you could theoretically argue ownership of that cash, between you and your dad's partner, and claim that it is at least partially outside of the scope of IHT.
Also, on the £85k, I am sure it could be argued that the relationship with your father was not purely a father/son relationship, but also a business one. Although I see Rob above disagreed and I would always go with his opinion over mine if in doubt.
Hi Huskaris. Thanks for the kind words. Sadly, no, the house is not being left to me solely because his partner wants security of being able to stay in the house that putting it in joint names and stating her right to live there within the will gives her. Sadly, that means us losing the £70k financial benefit we would have had by the house being left to me.
Hi Huskaris. Thanks for the kind words. Sadly, no, the house is not being left to me solely because his partner wants security of being able to stay in the house that putting it in joint names and stating her right to live there within the will gives her. Sadly, that means us losing the £70k financial benefit we would have had by the house being left to me.
Are you sure about that? I am not saying you are wrong, but I would say that if you are 50% owner, than you should be due at least £35k of the financial benefit.
I know it is absolutely... Strange... But have they considered getting married...? It really is not as rare as you might think...
There is normally no tax to be paid if you leave everything above the threshold to a spouse or civil partner.
Could your father not now "gift" you £325k. This could be the gift from 2019, plus the joint account funds, plus some of his current cash, and then give everything else to his partner, were they to marry, tax free.
Again, I know it is... Difficult, but I just thought I would put it out there. I am sorry if this is insensitive in any way.
Hi Huskaris. Thanks for the kind words. Sadly, no, the house is not being left to me solely because his partner wants security of being able to stay in the house that putting it in joint names and stating her right to live there within the will gives her. Sadly, that means us losing the £70k financial benefit we would have had by the house being left to me.
Are you sure about that? I am not saying you are wrong, but I would say that if you are 50% owner, than you should be due at least £35k of the financial benefit.
I know it is absolutely... Strange... But have they considered getting married...? It really is not as rare as you might think...
There is normally no tax to be paid if you leave everything above the threshold to a spouse or civil partner.
Could your father not now "gift" you £325k. This could be the gift from 2019, plus the joint account funds, plus some of his current cash, and then give everything else to his partner, were they to marry, tax free.
Again, I know it is... Difficult, but I just thought I would put it out there. I am sorry if this is insensitive in any way.
This is going to be a very complicated estate, do you really mean he's left half the house to each of you and she has a right to live there? i.e. she is actually inheriting half and you half? Is this just in the will or is there a legal agreement? Does she have the right to leave her half to someone/anyone she chooses?
If the right to live there is a legal agreement for the partner the nil rate band for housing may not apply as you in effect have the property held in trust but it does depend on the type of trust, if you have absolute interest or interest in possession etc.
From what we know I think you are right with;
£976k less £325k allowance = £651k @ 40% = £264k
The estate as above would split as follows;
£976k - Estate £264k - IHT to pay £30k - to Partner £350k - House Value
Remaining to be distributed 50/50 with you and your fathers partner £332k = £166k each.
You really need to see a Lawyer and probably a IHT specialist accountant ASAP. Appreciate what your dad is trying to do but he's pretty much doing it in the least efficient way for all concerned.
Inheritance Tax advice please on the following scenario:
1. My dad funded the £76,000 purchase of a property abroad in 2010 that was registered in our joint names. 2. In 2011, for convenience purposes, the property was transferred into my sole name. Effectively, he ‘gifted’ me the property abroad when he removed his name from the title deeds 3. I sold the property for £90000 in 2014.
4. I paid dad back £85,000 representing his funds and a share of the profit 5. In 2019 dad ‘gifted me’ £215k
Dad’s not well now and may not make it. The implications of this and other assets held means that we will be liable for 40% inheritance tax on the £215k gift.
So...................I am thinking that maybe I could argue with the tax man that the £85k I paid dad was an interest free loan and that he, effectively repaid me as part of the £215k he gave me in 2019. On the basis that the asset sold was in my sole name, do you think that would be a reasonable story to justify excluding £85k from the £215k when calculating what is and isn’t subject to inheritance tax?
What do you guys ‘in the know’ think of my chances of winning that argument with HMRC?.
First thing I will ask is have you spoken to a solicitor yet ? I remember your post from 2 weeks ago & @Rob7Lee gave you some very helpful advice then. I think you have greater problems than tax on the "gift" if your dads partner still has access to his £170k.
As for the "gift" itself. I don't think you'll get anywhere with HMRC over the return of the loan to your father a few years ago. Did you pay tax on the property gain, if not then you might have more to lose on all this & as @Rob7Lee points out, they will certainly look into ALL aspects of the payments between you & your father over the past 10 years.
Inheritance Tax advice please on the following scenario:
1. My dad funded the £76,000 purchase of a property abroad in 2010 that was registered in our joint names. 2. In 2011, for convenience purposes, the property was transferred into my sole name. Effectively, he ‘gifted’ me the property abroad when he removed his name from the title deeds 3. I sold the property for £90000 in 2014.
4. I paid dad back £85,000 representing his funds and a share of the profit 5. In 2019 dad ‘gifted me’ £215k
Dad’s not well now and may not make it. The implications of this and other assets held means that we will be liable for 40% inheritance tax on the £215k gift.
So...................I am thinking that maybe I could argue with the tax man that the £85k I paid dad was an interest free loan and that he, effectively repaid me as part of the £215k he gave me in 2019. On the basis that the asset sold was in my sole name, do you think that would be a reasonable story to justify excluding £85k from the £215k when calculating what is and isn’t subject to inheritance tax?
What do you guys ‘in the know’ think of my chances of winning that argument with HMRC?.
First thing I will ask is have you spoken to a solicitor yet ? I remember your post from 2 weeks ago & @Rob7Lee gave you some very helpful advice then. I think you have greater problems than tax on the "gift" if your dads partner still has access to his £170k.
As for the "gift" itself. I don't think you'll get anywhere with HMRC over the return of the loan to your father a few years ago. Did you pay tax on the property gain, if not then you might have more to lose on all this & as @Rob7Lee points out, they will certainly look into ALL aspects of the payments between you & your father over the past 10 years.
Hi Golfie. Well, since my last post, I haven’t spoken to a solicitor yet but I have found out that dad has just rewritten his will and I’ve found out more about the exact value and whereabouts of dad’s assets which is as follows:
1. £82k held in a joint account with dad and me 2. £236k held in joint names with dad and his partner 3. £38k held in dads sole name 4. Dad has £25k in PSBs and shares 5. Dad has ‘gifted’ his partner £30k which is in her sole account now 5. House valued at £350k 6. £215k ‘gift’ was made to me in 2019.
Total value of assets potentially subject to IHT: £976k
Will Update: The new will leaves the house to me and his partner jointly with her having a right to live there all of her life. The rest of dad’s ‘residual assets’ are to be shared equally between his partner and I.
So, I calculate inheritance tax to be as follows:
£976k less £325k allowance = £651k @ 40% = £264k
Absolutely gutted that we are throwing away £70k of IHT benefit by dad not leaving the house to me as his descendent because, effectively, he and his partner don’t want to risk that I won’t add her name to the deeds after the event.
His partner understands that the money in her sole and joint accounts will need to be used to pay the inheritance tax bill so that she can then live in the property. If you add my £82k and dads £38k to her total of £266k plus the liquid assets of £25k, that makes it £411k less £264k IHT, leaving £147k to be split 50/50 = £73.5k each. From that, £15k has been bequested to friends. That means just £132k to share each; £66k each.
I’ve made it clear to her that IHT has to be paid before any bequests can be made. If she refuses to stump up her cash to pay IHT then I have explained that the house would have to be sold to pay the IHT.
Rob/Golfie/Huskaris: is that how you see it too? Can you see any way we can reduce the IHT and still protect dad’s partner’s right to live in the house for the rest of her days? Is there any point in me seeing a solicitor or IFA?
As you all know, I'm an IFA and not an IHT expert & why I seriously advise you to speak to a solicitor asap. As @Huskaris has said, money being held jointly can be viewed in various ways. Money on deposit is generally viewed as being owned 50/50 so the money in joint accounts is legally only 50% his. It used to be the case (before Self Assessment) that you could deem the % held other than 50/50 & I know many high rate taxpayers who used to say that joint money was, in fact, 100% their non-taxpaying spouse's money.
Therefore conversely, your fathers partner could quite easily say that the money held jointly is hers (or certainly 50% is) and legally she can not be compelled to use any of her half to pay the IHT tax bill. As they are not married she has no legal connection to him and that the Estate (or should I say, the Executor of the Estate) is liable for the tax bill. She could quite legally take her 50% out of the joint bank account tomorrow & spend it as she so wishes.
As for the house. Like @Huksaris, I would have thought the £175k "property" element of the NRB would apply in this case & again why I urge you to speak to a probate solicitor pronto. Also, if she did take 50% of the joint account monies & ran, you could not just sell the house & use the proceeds to pay the IHT bill. I believe that you will have to make provisions for her to live somewhere if she owns the property jointly with you & has a right to stay there until she dies.
Unfortunately what you or her "understand" should happen after your Fathers death with regard to paying the IHT does not mean it will happen. The only thing that matters is what is legal.
Please speak to a solicitor on Monday - as well as the one that drew up his Will as I can see so many things that can go wrong with what you father has done.
Rob: me and his partner are the be beneficiaries of the will but also the joint executors and trustees. As you say, very complicated. The will suits his partner very much in the short term with £66k cash and use of a £350 house for her whole life. I only see the value in the house if I outlive her.
I am assuming from the wording in the will that she and I would be ‘joint tenants’ of the house but those words aren’t actually used. As you suggest, I will seek advice on this whole mess but Christ knows how I get to change anything if the advice tells me that the current arrangement is bad overall.
Rob: me and his partner are the be beneficiaries of the will but also the joint executors and trustees. As you say, very complicated. The will suits his partner very much in the short term with £66k cash and use of a £350 house for her whole life. I only see the value in the house if I outlive her.
I am assuming from the wording in the will that she and I would be ‘joint tenants’ of the house but those words aren’t actually used. As you suggest, I will seek advice on this whole mess but Christ knows how I get to change anything if the advice tells me that the current arrangement is bad overall.
Is the £30k a gift he has given whilst alive or has he left that amount in the will? I think after expenses and your numbers may be slightly out of order depending on the £30k (and indeed what he's left to friends) I think you're likely to see cash of £40-45k each.
Dyer and Co are very good, but don't know where you are based.
Plus you need real clarity on the property, what she is entitled to by way of living there etc. Also as she is being left half in the will she can do with that as she wishes in her own will, in fact of she died her current husband may well inherit it!
Comments
no way, he’s too cool for school
- what I own, when I own a Vechain token (as opposed to a Unilever or Google ordinary share)
- when a company, such as IBM "uses" Vechain, how does it access it, is something installed, who installs it, and most of all how and how much does IBM pay Vechain for this?
- Vechain is apparently not for profit. Fine. neither is Tesla, apparently. But Tesla rakes in revenue by selling cars. As a result its share price goes up. What would make Vechain token price go up, if not the revenue coming in? And if it is the revenue, why can I not find out a single thing about what it sells and to whom?
And of course Vechain is just one example. What about all those other weird and wonderful names they are all jabbering on about? Like Zil. What is Zil? (same questions as for Vechain). I don't remotely take it personally that my questions were blanked other than by you. But I think it's very telling, and a big red flag for anyone else tempted to get in without having the answers to such questions.
As for bubble, it seems to keep bursting and being inflated again!
Must have been about 4-5 years ago I bought some, can't even remember now the price but I made about 50% in a couple of months (we're talking hundreds of pounds invested not thousands). I saw it rise 2/3 fold very soon after, slap face time, only to see it go back to below what I bought at within a year, of course now it's back up to 3x. Talk about roller coaster.
I look at the chart sometimes, take the last week, as high as nearly 42k and as low as 30k, or the last month it at one pint had more than doubled since mid December and thats before I try to understand like Richard what on earth it is i'm buying!
I'm sure many have and will get rich and I suspect many will also lose fortunes.
I've also said that until fund management groups such as Baillie Gifford, JP Morgan, Schroders etc start investing in them & you can clearly see them in their fund holdings then I'll keep clear. Call me a dinosaur but I'd rather trust the above fund managers (who seem to know their onions) to a bunch of faceless individuals hiding behind the internet.
1. My dad funded the £76,000 purchase of a property abroad in 2010 that was registered in our joint names.
2. In 2011, for convenience purposes, the property was transferred into my sole name. Effectively, he ‘gifted’ me the property abroad when he removed his name from the title deeds
3. I sold the property for £90000 in 2014.
5. In 2019 dad ‘gifted me’ £215k
Dad’s not well now and may not make it. The implications of this and other assets held means that we will be liable for 40% inheritance tax on the £215k gift.
So...................I am thinking that maybe I could argue with the tax man that the £85k I paid dad was an interest free loan and that he, effectively repaid me as part of the £215k he gave me in 2019. On the basis that the asset sold was in my sole name, do you think that would be a reasonable story to justify excluding £85k from the £215k when calculating what is and isn’t subject to inheritance tax?
What do you guys ‘in the know’ think of my chances of winning that argument with HMRC?
There may then be tax implications of the money you gave to your dad? If it was a loan, I would have thought that you need documentation from the time to back that up and then there would at least be a benefit in kind consideration for that loan (I may have this all wrong but I'm fairly sure, bar the 3,500 rule and certain other specific situations, you can only transfer sums between spouses without income tax implications).
You may want to clarify all that with a tax advisor before contacting HMRC and getting clobbered with more than IHT.
Ignore this just googled it and realised my initial comment was stupid
TBH I think you are clutching straws. What if they ask for the proof of the loan to you in the first place? I worked for a bank some years ago and it wasn't 'that' unusual for HMRC to ask for banking transactions for way past 10 years.
What if they ask how you funded the purchase in the first place? Or proof of him loaning you the money?
If nothing else your father needs to gift you (or someone else) £3k now and £3k for last tax year (assuming he hasn't already) and if possible a fair number of £250 gifts to other individuals. Any children/Grandchildren got married recently?
IHT can feel barbaric and annoying, but sadly it is the rules, minimise it as much as you can now, but trying to make up stories about cash flow in the past is only going to put you in hot water at a time you really won't need the hassle.
Think you just need to accept the tax man will be owed some money, but within the rules minimise that as much as humanly possible, you'll still get £500k (inc house allowance) and 60% above that.
As for the "gift" itself. I don't think you'll get anywhere with HMRC over the return of the loan to your father a few years ago. Did you pay tax on the property gain, if not then you might have more to lose on all this & as @Rob7Lee points out, they will certainly look into ALL aspects of the payments between you & your father over the past 10 years.
Help! Anyone remember my bitcoin password?
Let me explain my reaction to the news that a San Francisco-based programmer has around $220m in bitcoin, but cannot remember the password. According to the New York Times, Stefan Thomas has only two more guesses to access the keys to a digital wallet that contains his fortune. Otherwise he loses the lot. I think there was a brief moment when I found it hilarious. Then I found it too painful to think about. Now I have reached a state of acceptance. This is the kind of Sliding Doors moment that we all fear — what if we never met our partner, what if we took that plane, what (in my case) if I had slipped jumping from a ledge into a rock pool. Life could have been so different. Accidents do happen, especially to bitcoin investors. An estimated 20 per cent of the digital currency is stranded — owned, for example, by people who can’t remember how to access it. I thought these guys were against the right to be forgotten?
A Financial Times colleague wisely wrote down the passphrase to his bitcoin, now worth a few thousand pounds. Sadly he wrote it down wrong. As long as he doesn’t write things down wrong in the FT, he’ll be fine. But other forgetful bitcoiners will bang their heads against their Tesla prospectuses, because the dollar value of their currency has more than tripled in the past year. A Welsh IT worker claims he binned a laptop with £230m of bitcoin, and has spent eight years asking the council for permission to search its landfill. There are serious implications for bitcoin, which wants to be a store of value, but is clearly overemphasising the storing part. Remember that it is the most environmentally damaging currency imaginable, with a carbon footprint bigger than Sri Lanka, because of the computing power required to create each token. If Silicon Valley wanted to pollute the world while creating nothing of usable value, it should have copied Northern Ireland’s cash-for-ash scheme. There are broader lessons for digital evangelists. Internet libertarians envisage that people will flourish when the regulatory guardrails are thrown off and inefficient humans are replaced by automated systems. But what if humans are quite useful? Walk in beaten and empty-handed to a bank branch, and the tellers will find a way to reconnect you with your overdraft. Whereas, even if you could identify bitcoin’s mysterious founder Satoshi Nakamoto, he couldn’t help you access your digital wallet. For a species that forgets things, that is suboptimal.
The other lesson is about genius. Silicon Valley loves a genius, often identified by how early they invested in X or what employee number they were in Y. But maybe the people who invested early in Facebook weren’t geniuses — they were just lucky. Maybe the people who become viral stars are not the funniest or the best singers. Password-amnesiac Mr Thomas was given his 7,002 bitcoin for making a video — a task millions of people could have done. He could be worth as much as Ed Sheeran or become the internet’s version of the Fifth Beatle. But it wouldn’t say much about his ability or contribution to society. “If you can make one heap of all your winnings / And risk it on one turn of pitch-and-toss / And lose, and start again at your beginnings / And never breathe a word about your loss . . . ,” wrote Rudyard Kipling. No one can really follow that advice. No one can treat triumph and disaster the same, even though luck often decides which we end up with. All we can do is have compassion for those people who never made their fortune, who never fell in love, who fell ill. Four years of Donald Trump has surely taught America that wealth does not correlate with moral status. If bitcoin teaches Silicon Valley the importance of luck, then maybe it will have created real value after all.
Whilst not wanting this thread to turn into a crypto thread, that was incredibly interesting to read.
Having the carbon footprint of Sri Lanka is unbelievable, and disgraceful... A mate who is now obsessed by crypto, and who I would very kindly describe as being void of braincells, sent me a video of someone who had put all of the processors inside a radiator frame, so the bitcoin miner was basically being used as a radiator for their home!
In his case, he got into crypto because he bought too much bitcoin when buying an ounce of cannabis, and saw the value rocket.
Almost everyone I have seen get into crypto has absolutely no finance intelligence or background, which is probably why they have invented their own language (like a cult, your point which I completely agree with).
It is a market where people basically follow the crowd. Once it starts falling, it is going to massively tumble, and then when it rises, as we have seen, it will rocket.
Any "currency" that goes up or down at the rate it does, will never be able to be a practical currency in reality. Everyone who "holds" bitcoin becomes a huge speculator, and that is not appealing.
I get worried enough where I work about our FX exposure risk which could swing our profitability by 3-4%. Crypto could swing it by hundreds of percent.
Drugs, guns, and speculation, not a credible currency.
1. £82k held in a joint account with dad and me
2. £236k held in joint names with dad and his partner
3. £38k held in dads sole name
4. Dad has £25k in PSBs and shares
5. Dad has ‘gifted’ his partner £30k which is in her sole account now
5. House valued at £350k
6. £215k ‘gift’ was made to me in 2019.
Total value of assets potentially subject to IHT: £976k
Will Update: The new will leaves the house to me and his partner jointly with her having a right to live there all of her life. The rest of dad’s ‘residual assets’ are to be shared equally between his partner and I.
So, I calculate inheritance tax to be as follows:
£976k less £325k allowance = £651k @ 40% = £264k
Absolutely gutted that we are throwing away £70k of IHT benefit by dad not leaving the house to me as his descendent because, effectively, he and his partner don’t want to risk that I won’t add her name to the deeds after the event.
His partner understands that the money in her sole and joint accounts will need to be used to pay the inheritance tax bill so that she can then live in the property. If you add my £82k and dads £38k to her total of £266k plus the liquid assets of £25k, that makes it £411k less £264k IHT, leaving £147k to be split 50/50 = £73.5k each. From that, £15k has been bequested to friends. That means just £132k to share each; £66k each.
I’ve made it clear to her that IHT has to be paid before any bequests can be made. If she refuses to stump up her cash to pay IHT then I have explained that the house would have to be sold to pay the IHT.
Rob/Golfie/Huskaris: is that how you see it too? Can you see any way we can reduce the IHT and still protect dad’s partner’s right to live in the house for the rest of her days? Is there any point in me seeing a solicitor or IFA?
Firstly, I hope that everything is going as well for you as it can be.
On inheritance tax, I would recommend you look at the following:
https://www.which.co.uk/money/tax/inheritance-tax/inheritance-tax-property-changes-asy688s1j5zj
"Under the rules, if you're passing your home to a direct descendant, you can benefit from an additional £175,000 in tax-free allowance in the 2020-21 tax year, up from the £150,000 allowance in 2019-20. The allowance only applies if you leave your home to a direct descendant – either a child or grandchild. Nieces and nephews, or friends, for example do not qualify."
I would hope that this would mean that your new IHT allowance is actually £500k due to the house being passed down to you. I would be interested to see other people's thoughts on this....
It would change the amount to £976k-£500k = £476k @ 40% = £190.4k.
Also, do you know the source of the funds in the joint accounts? I am no tax expert, at all, but I would think that would help in determining if IHT is due on those 2 joint accounts.
See this as an example:https://www.thisismoney.co.uk/money/wealthcheck/article-6565421/Is-money-held-mums-joint-bank-account-late-nan-subject-IHT.html
Not specific to your case, but very similar.
Also this: https://www.taxinsider.co.uk/inheritance-tax-pitfall-whose-money-is-it
In effect, you could theoretically argue ownership of that cash, between you and your dad's partner, and claim that it is at least partially outside of the scope of IHT.
Also, on the £85k, I am sure it could be argued that the relationship with your father was not purely a father/son relationship, but also a business one. Although I see Rob above disagreed and I would always go with his opinion over mine if in doubt.
Best of luck to you, and keep us updated.
I know it is absolutely... Strange... But have they considered getting married...? It really is not as rare as you might think...
There is normally no tax to be paid if you leave everything above the threshold to a spouse or civil partner.
Could your father not now "gift" you £325k. This could be the gift from 2019, plus the joint account funds, plus some of his current cash, and then give everything else to his partner, were they to marry, tax free.
Again, I know it is... Difficult, but I just thought I would put it out there. I am sorry if this is insensitive in any way.
If the right to live there is a legal agreement for the partner the nil rate band for housing may not apply as you in effect have the property held in trust but it does depend on the type of trust, if you have absolute interest or interest in possession etc.
From what we know I think you are right with;
£976k less £325k allowance = £651k @ 40% = £264k
The estate as above would split as follows;
£976k - Estate
£264k - IHT to pay
£30k - to Partner
£350k - House Value
Remaining to be distributed 50/50 with you and your fathers partner £332k = £166k each.
You really need to see a Lawyer and probably a IHT specialist accountant ASAP. Appreciate what your dad is trying to do but he's pretty much doing it in the least efficient way for all concerned.
Therefore conversely, your fathers partner could quite easily say that the money held jointly is hers (or certainly 50% is) and legally she can not be compelled to use any of her half to pay the IHT tax bill. As they are not married she has no legal connection to him and that the Estate (or should I say, the Executor of the Estate) is liable for the tax bill. She could quite legally take her 50% out of the joint bank account tomorrow & spend it as she so wishes.
As for the house. Like @Huksaris, I would have thought the £175k "property" element of the NRB would apply in this case & again why I urge you to speak to a probate solicitor pronto. Also, if she did take 50% of the joint account monies & ran, you could not just sell the house & use the proceeds to pay the IHT bill. I believe that you will have to make provisions for her to live somewhere if she owns the property jointly with you & has a right to stay there until she dies.
Unfortunately what you or her "understand" should happen after your Fathers death with regard to paying the IHT does not mean it will happen. The only thing that matters is what is legal.
Please speak to a solicitor on Monday - as well as the one that drew up his Will as I can see so many things that can go wrong with what you father has done.
Dyer and Co are very good, but don't know where you are based.
Plus you need real clarity on the property, what she is entitled to by way of living there etc. Also as she is being left half in the will she can do with that as she wishes in her own will, in fact of she died her current husband may well inherit it!