Hi,
My Dad passed away recently and left a simple will dividing his assets up between myself and my 3 sisters. In his final days he expressed a wish to gift some cash to a couple of people who were involved in his care and also to extend the will to include his grandchildren, in a way that didn't disadvantage any one of his children. In the end, none of this got done.
As I understand it, there would be tax advantages to both those points he wanted. He could have gifted up to 15,000 to non related carers and up to 30,000 to his grandchildren. In the UK we could simply do a deed of variation to rewrite the will, once it was not in our favour. I see mention online of something similar in Ireland called a Deed of Family Arrangement. What we would like to do with this is to do the two carer bequests off the top, then divide out the remaining estate so that each sibling's tax benefit is maximised - i.e. each sibling get their 25% less how ever many 30,000 bequests have been left to their kids (we don't all have the same number of kids). This would save 33% tax on those grandchildren gifts. - e.g. if one sibling was due 500,000 they would be taxed at 33% on 275,000 (after the 225,000 allowance). But if 90,000 of that was gifted to her three kids then the tax is 33% on 185,000, a tax saving of nearly 30,000 for that one sibling alone.
Is that a valid use of a Deed of Family Arrangement? Has anyone every done that? It seems to be a fairly simple tax planning exercise, assuming the beneficiaries are up for passing some of the cash straight to their kids (which is the case with my siblings). Any thoughts on whether it is worth doing from a fees point of view? The will is simple enough to do ourselves without this, but would need a solicitor to do the deed and set up trusts for those kids under 21.
Thanks!
My Dad passed away recently and left a simple will dividing his assets up between myself and my 3 sisters. In his final days he expressed a wish to gift some cash to a couple of people who were involved in his care and also to extend the will to include his grandchildren, in a way that didn't disadvantage any one of his children. In the end, none of this got done.
As I understand it, there would be tax advantages to both those points he wanted. He could have gifted up to 15,000 to non related carers and up to 30,000 to his grandchildren. In the UK we could simply do a deed of variation to rewrite the will, once it was not in our favour. I see mention online of something similar in Ireland called a Deed of Family Arrangement. What we would like to do with this is to do the two carer bequests off the top, then divide out the remaining estate so that each sibling's tax benefit is maximised - i.e. each sibling get their 25% less how ever many 30,000 bequests have been left to their kids (we don't all have the same number of kids). This would save 33% tax on those grandchildren gifts. - e.g. if one sibling was due 500,000 they would be taxed at 33% on 275,000 (after the 225,000 allowance). But if 90,000 of that was gifted to her three kids then the tax is 33% on 185,000, a tax saving of nearly 30,000 for that one sibling alone.
Is that a valid use of a Deed of Family Arrangement? Has anyone every done that? It seems to be a fairly simple tax planning exercise, assuming the beneficiaries are up for passing some of the cash straight to their kids (which is the case with my siblings). Any thoughts on whether it is worth doing from a fees point of view? The will is simple enough to do ourselves without this, but would need a solicitor to do the deed and set up trusts for those kids under 21.
Thanks!