| BOB and
POPPY owned a farmhouse which had seven acres of ground
with it. They used the land as two paddocks for their
daughter’s ponies. They had one daughter and two
elder sons. Both sons were married and had their own
homes. Daughter lived at home
Bob and Poppy had bought the property
some twenty four years ago. Bob’s job had been
with an engineering firm in the industrial Midlands
but he had taken early retirement two years ago due
to ill health - he has a cancer which at present is
in remission.
The property is now worth over £1m
and between them Bob and Poppy have investments of just
over £50K. Bob has a pension from his employers
and has a small pension from a private fund he started
seven years before he had to retire. Poppy has a small
income from a part-ime job. Together their income is
just over £30,000 p.a.
This is a classic situation today
- A COUPLE ARE ASSET RICH BUT CASH POOR. What is worst
of all, even if they spend all their cash before they
die, when the second one dies, tax will be payable at
40% on the net worth of their assets (the house and
land currently £1m less one nil rate band of £263K
-- A WHOPPING £294,800 !!!
With careful planning and forethought
this horrendous bill can be reduced to to a very modest
amount without the need for insurance (expensive bearing
Bob’s health in mind) and more importantly without
the house being sold, which neither of the parents want.
Case Studies - 1
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