Daniel Craig to Leave his Children £0.07?
A story has been released this week that Daniel Craig finds the concept of inheritance ‘distasteful’. Daniel Craig and his actress wife Rachel Weisz are rumored to have a combined net worth in the region of $190 million but they do not intend to leave their vast fortune to their children.
Whilst being interviewed for his most recent film he was asked about leaving his Estate to his children. He quoted the adage that if you die a rich person that you have failed, he intends to spend his money or give it away. Whilst I understand Daniel Craig wanting to make sure that his children fend for themselves and learn the value of work it is quite an unusual decision to disinherit your children.
As a private client solicitor this brings two things to mind;
Inheritance tax liability is based upon the amount that your Estate is worth at the date of your death. In England and Wales you have a nil rate band of £325,000 subject to any gifts you may make in the seven years before death and a residence nil rate band of £175,000, as long as you leave your home to lineal descendants, before you have to pay inheritance tax. Married couples are also able to double up their nil rate bands by passing everything to each other depending on the size of their Estate. In Estates over £2million a claw back provision applies where £1.00 of the residence nil rate band will be reduced for every £2.00 over £2 million.
However, inheritance tax is one of the heftier taxes put in place and everything over the £1 million mark is taxed at a rate of 40%. However, if you have given it all away how can you be taxed on it?
Well it largely depends on when they decide to give it away. HMRC are unfortunately a little bit too clever for you giving your entire Estate away on your deathbed. HMRC will include gifts which you have given in the seven years proceeding your death in your Estate. Therefore, Daniel Craig and Rachel Weisz will have to be very careful when they give away their Estate to make sure to do so more than seven years ago before passing away.
Is there Anything their Children Can Do?
In England and Wales we have freedom of testation. This means that you do not have to provide any assets to our children if you do not want to. You can leave our assets to the cats home or your local bartender if you so desire.
However, your family do have some ability to make a claim on your Estate for Inheritance. The family members who have the best claim against your Estate are your spouse and any minor children. They can make a claim under the Inheritance Family Provision and Dependents Act. This Act states that an individual should make reasonable financial provision for those who are financially dependent on them.
There are certain factors that a court will take into account such as the relationship between the deceased and the person making the claim, the size of the estate, the financial needs of beneficiaries amongst others.
Given Daniel Craig has not said he will be disinheriting his children and in fact just may leave them money during his lifetime or simply leaving him a smaller amount of his Estate a claim may well be unnecessary.
Should you wish to discuss Estate Planning or gifting during your lifetime please contact Samuel Flower at firstname.lastname@example.org or Lorna Bastian email@example.com to make an appointment.