Thursday, January 15, 2009

The Year Ahead

I seem to have had less time to myself over the last couple of weeks and during the little I've had, I've been far too tired to think about writing anything. So, where was I?

Ah, yes. Plans. Big ones at that. More on that in a minute but first some background and a catch up.

My grandmother's funeral went very well. Despite having a very small family (she was an only child, as is my mother), around 40 people attended the service at the crematorium, which made it into a much more meaningful affair. Mum read the eulogy, which was full of little nuggets that brought back special memories of her. Suffice it to say that it was very emotional.

She had been heavily involved in local politics for decades and was the chair of the Conservative association for many, many years until she gave it up in 1999, at the age of 79. So we expected a few councillors and other local political connections to be there. And they were, along with the MP for the constituency, even though he was first elected in 2005 and only knew of my grandmother "through legend". Okay, the funeral may have been a couple of days after the parliamentary Christmas break began so he didn't have as much on as he would have a couple of weeks earlier, but he came on to the reception and was among the last of the guests to leave, two hours later. Definitely beyond the call of duty.

With that over and done with, thoughts naturally turn to what to do with the estate and this is where the plans all stem from. You see, my grandmother, while not what you would call rich, was certainly well-off. Enough to make us glad that Mum could lay her hands on her father's will and prove that he left everything to his wife, so we won't be paying any inheritance tax. And because the family is so small, once Mum has taken whatever she believes she needs, the rest will be split three ways. The numbers are still up in the air at the moment but it's likely to be roughly the same as two year's salary for me; a significant sum.

So all of a sudden, we don't really need to worry about tightening our belts in these uncertain economic times. In fact, we planning on taking advantge of them and spending tens of thousands on improving our home and garden, hopefully all this year so that we can get away with paying 15% VAT - I'm now something of a fan of the reduction, although I don't believe it's working more generally. There should also be enough left to allow us to replace the car and to pay a lump sum off the mortgage.

More details, at least, those I'm prepared to give out - you may have noticed the above is a little light on facts, on those plans as they develop. For now, all that remains to say is that, if everything goes to plan, 2009 will be the year that our lives and our finances become more comfortable and secure. And how many people at the moment can say that?

6 comments:

Blue Witch said...

Me :)

Nice feeling innit? Mind you, we've not had a penny in inheritance between us, depsite having lost 3 grandparents and two parents.


Not sure about your assertion that, "Enough to make us glad that Mum could lay her hands on her father's will and prove that he left everything to his wife, so we won't be paying any inheritance tax." is correct.

*She* won't have paid IHT on it when she inherited it, but if the estate is over £312,000, then I fear you will be paying 40% of everything above that to Golden Brown for him to squander on illegal wars, handouts to OAPs who don't need it etc etc (insert your own current personal peeve). (see eg http://www.hmrc.gov.uk/rates/iht-thresholds.htm)

Enjoy spending it. I look forward to the builder stories ;)

Dave said...

Ah, but the Government changed the rules over a year ago to allow anyone who died after 9 October 2007 to use any unused exemption from when their spouse died. Since my grandfather left everything to my grandmother and therefore didn't qualify for inheritance tax, the whole of his exemption passed to her.

Blue Witch said...

Effectively meaning that you now get 2 x £312K in these circumsatnces? I have a suspicion that I had totally forgotten about that! Have you got a link for that?

Dave said...

Actually, I believe you get whatever the exemption was at the time your spouse passed away, so the most it would be is £312k. However, I can't find anything that explicitly says that and it's an outstanding question with the solicitor.

See here for the initial news story.

Blue Witch said...

That makes sense (and would probably be why there is a long list of IHT thresholds for every year now on the HMRC site).

Do post more on this when you find out. You're the first person I know who's been affected by it and it's always useful to have this sort of info stored up because one just never knows when it will come in handy.

Dave said...

I have found out more today but it deserves a post of it's own so I'll try and get around to it later on this evening.