Fam­ily fi­nances

Woman's Weekly (UK) - - Knitting -

In­her­i­tance tax worry

Q My fa­ther died some years ago and my mother is 95. She still lives in our fam­ily home, which has risen con­sid­er­ably in value over the years, and I un­der­stand that when she dies, in­her­i­tance tax will be payable on her es­tate. I’m con­cerned that the house might take a while to sell. would I have to pay the tax straight away, or can I de­lay it un­til the house is sold? A In­her­i­tance tax usu­ally has to be paid by the end of the sixth month af­ter a per­son dies. How­ever, if the bulk of the es­tate is the value of the house, you can pay in in­stal­ments for up to 10 years. You’re un­likely to need that long – the 10-year pe­riod is mainly used by peo­ple who want to keep the fam­ily home – but it means you don’t

need to find the whole sum be­fore the house is sold.

The tax payable is di­vided into 10 equal in­stal­ments

– the first due at the end of the sixth month af­ter your mother died, and the sec­ond a year later. How­ever, in­ter­est is charged on that sec­ond in­stal­ment and the sub­se­quent ones, so it would be a good idea to try to have the house sold by then.

Bank of Mum and Dad

Q our daugh­ter is des­per­ate to

buy a flat but is strug­gling to

save the re­quired de­posit. we have sav­ings and would love to help, but we need to be sure we’ve pro­vided for our­selves in later years, too. A One op­tion is a fam­ily mort­gage. Dif­fer­ent lenders op­er­ate these in slightly dif­fer­ent ways, but the ba­sic idea is that your sav­ings can be set against the mort­gage, as se­cu­rity. You put the money into an ac­count and can’t take it out un­til your daugh­ter has paid off a cer­tain amount of the mort­gage – but it’s still your money and as long as she doesn’t de­fault on the loan, you will get it back.

A num­ber of lenders of­fer this type of mort­gage now. Do bear in mind though that if your daugh­ter can’t make her pay­ments, you could lose your money.

Ag­gres­sive sell­ing

Q I re­cently dis­cov­ered that my 83-year-old aunt was per­suaded to switch her free cur­rent ac­count to one that costs £15 a month, but comes with travel in­surance and car break­down cover. She’s been pay­ing that for three years – but she stopped driv­ing two years ago and the travel in­surance doesn’t cover any­one over 80. Can she claim her money back? A Yes. These ‘pack­aged’ bank ac­counts have been sold very ag­gres­sively in the past few years, but bank staff are sup­posed to check whether the ac­count is suit­able for the cus­tomer be­fore they sell it, then check it’s still suit­able once a year af­ter that. If they don’t – as here – it’s a clear case of mis-sell­ing. Your aunt can claim back what she’s paid, plus in­ter­est of 8% a year. If the bank won’t pay, she can take her case to the Fi­nan­cial Om­buds­man (find out how at fi­nan­cial-om­buds­man.

org.uk, or call 0800 023 4567).

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