how to avoid inheritance tax?

hello i am due to inherit a house worth about half a million or more by the time i inherit at the moment my elderly aunt lives there and it needs a lot doing to it rewiring roofing etc. i thought it might be a good idea to make it a bussiness such as a very sparse frugal theme hostel/b&b then when i inherit or recieve it as a living gift it will only be taxed on ten percent of its worth as per buss and agriculteral holdings. will this be enough to bypass the enormouse taxes due????

Re: how to avoid inheritace tax??

What about your Aunt? Won't she mind a load of backpackers arriving on her doorstep.

Re: how to avoid inheritace tax??

How inconsiderate of your 'stubborn' aunt not to faciliate your industrious plans for herhome!

Re: how to avoid inheritace tax??

She might leave it to the cat sanctuary. They always welcome legacies. Problem solved.

Re: how to avoid inheritace tax??

She might decide to spend it all in a fit of wild living.

Its not going to be a business till after you get it. So how does that help?

I don't think there is a way of avoiding it, unless you devalue it below the threshold by filling it full of cats or something.

Re: how to avoid inheritace tax?

Now now boys and girls - we seldom get the full story from anyone here. It may well be that the elderly aunt has a perfectly good house of her own to go to but chooses to live in a house that she does not own for reasons best known to herself.

Having said that I'd always advise potential beneficiaries that the intention to benefit is not necessarily always translated into actuality and not to be counting chickens before they are hatched. The benefit is only theirs when the property is in their name and best ( for them) anyway to have the property transferred inter vivos ( during the lifetime of the donor). I would always advise a donor to hold onto their assets - never know when you're going to need a few bob.

mf

Re: how to avoid inheritace tax?

mf1 said:

The benefit is only theirs [the beneficiaries] when the property is in their name and best ( for them) anyway to have the property transferred inter vivos ( during the lifetime of the donor). I would always advise a donor to hold onto their assets - never know when you're going to need a few bob.

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Does that mean you would usually advise the beneficiary to have the asset transferred into the beneficiaries name inter vivos ( during the lifetime of the donor); and you would usually advise the donor not to do this and just to leave the asset in their will?

Re: how to avoid inheritace tax?

I am generally acting for one or the other. What benefits one does not necessarily benefit the other. Clients are free to ignore my advice - they frequently do. But when or if the **** hits the fan, at least they can say they were warned of the potential consequences.

The worrying thing is that often people do not seek proper advice before committing themselves to potentially ruinous situations. And at least if the donor still has the asset......... Mind you, they can always change their minds which is why the intervivos thing is better.

Swings and roundabouts and individual circumstances.

mf

Re: how to avoid inheritace tax?

mf1 said:

And at least if the donor still has the asset......... Mind you, they can always change their minds which is why the intervivos thing is better.

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By they do you mean the donor? Do you mean the intervivos thing is better for the beneficiary (not necessarily the donor)?

Just wondered as I'll have to think about having a will drawn up at some point...

Keep it on topic please-the tax issues of what the OP is planning to do.

Other sentiments can be expressed in Letting Off Steam.