Death & Taxes!

[puddingcat]

Yesterday I was evil for torturing gingerbread men. Today I'm twisted :)

M commented that someone had won £25k by betting that they'd live to 100. I simply said that it would be better to bet on one's parents living to a certain age, because then inheritance tax wouldn't be an issue on the winnings.

Apparently that's not a normal response. Seems perfectly logical to me...

Comments

[pink-weasel.livejournal.com]

To which I reply "eh"?

And his parents would be dead if he was 100, wouldn't they?

[puddingcat.livejournal.com]

Nonono, his *children* should have gambled on *him*. Then *they'd* have won the £25k, and it wouldn't be part of his estate when he eventually did die, so inheritance tax wouldn't be payable on it. Since *he* won it, it'll be part of the Stuff He Leaves, so IHT *will* be payable (unless he was pitifully poor).

[tama-grey.livejournal.com]

His children would still have to pay capital gains tax, though. Very difficult to keep the government from filching. Ideas: see which tax is less (inheritince or capital gains), donate to a family charity/trust fund or a non-profit, don't tell anyone and get the sum in cash...

[puddingcat.livejournal.com]

Cash isn't covered by the CGT rules :) If his kids had bet on him & made the £25k, it's exempt from tax - gambling winnings are exempt from income tax (unless you're a professional gambler...), cash is exempt from CGT, and the people who won the money wouldn't have died so IHT wouldn't be an issue, either :)

[feanelwa.livejournal.com]

When I am 100 I will be capable of spending £25,000 before I die, guaranteed. Actually, maybe he already has a lot of debt. What makes you think he didn't spend £25,000 on credit cards in the last ten years?