ChatterBank1 min ago
Inheritance Tax
if a daughter has lived in a house technically owned by the father for around 18 years, and the dad decides to transfer the property, legally, to the daughter - would it be subject to inheritance tax if he dies within 7 years?
does the fact that it has been the home of the daughter for almost 2 decades show somewhat that the home had in fact been 'given' to the daughter many years earlier - just not on paper.
Could this prove that he is not disposing of assets simply to avoid paying IT?
the father does not live in the house.
My dad is worried now that although he gave me the house many years ago, he thinks by not transferring it into my name i am going to lumbered with a massive IT bill - he is 86 so its possible he will not live another 7 years.
the mad thing is i am sure he has been worrying about this for more than 7 years by now!
are these cases judged purely on paperwork rather than circumstances?
Thanks
does the fact that it has been the home of the daughter for almost 2 decades show somewhat that the home had in fact been 'given' to the daughter many years earlier - just not on paper.
Could this prove that he is not disposing of assets simply to avoid paying IT?
the father does not live in the house.
My dad is worried now that although he gave me the house many years ago, he thinks by not transferring it into my name i am going to lumbered with a massive IT bill - he is 86 so its possible he will not live another 7 years.
the mad thing is i am sure he has been worrying about this for more than 7 years by now!
are these cases judged purely on paperwork rather than circumstances?
Thanks
Answers
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I don't think this is going anywhere now.
I am not sure I agree with the statement " that it is mine in all but the deeds ". If the estate has IHT liabilities and other debts, for example, I'd have thought the house may have to be sold by the eseate to pay those, and you will get the residue
Make sure the will is up to date and that the house and estate is properly willed to you. You could pay for IHT avoidance advice/action but as it's probably not worth it as it's probably too late.
He could transfer the house to you now but I don't see any benefit.
I think all the stuff about your having been a tenant years ago is not relevant now- unless you plan to claim some form of benefits again in the future.
I am not sure I agree with the statement " that it is mine in all but the deeds ". If the estate has IHT liabilities and other debts, for example, I'd have thought the house may have to be sold by the eseate to pay those, and you will get the residue
Make sure the will is up to date and that the house and estate is properly willed to you. You could pay for IHT avoidance advice/action but as it's probably not worth it as it's probably too late.
He could transfer the house to you now but I don't see any benefit.
I think all the stuff about your having been a tenant years ago is not relevant now- unless you plan to claim some form of benefits again in the future.
xxxx
# that it is mine in all but the deeds
# that i have long been named as being left the house upon his death,
- go any way towards proving to the IT that me ultimately owning the house legally in the future is not simply a deathbed gift, or a deliberate attempt to avoid IT if he signs it over while he's still here ... and therefore has some affect on the 7 year rule.
He feels its mine, that he gave it to me years ago, in fact that's why he bought the properties when we were little - because he wanted to be able to give us places to live.
so surely you can see that if he now puts the deeds in my name, it would not simply be a trick to get out of IT - because its just a formality - nothing would change for either of us, it has always been the intention.
xxxx
It's the deeds that matter
You haven't been named as getting the house - there's no will
It doesn't matter whether it's a trick to get out of IHT, a deathbed gift or anything else - it makes no difference
'Technically' (a word you've bandied about a lot with the meaning appearing to differ each time) there will be IHT if the estate is large enough if he doesn't survive 7 years. There's no way out of that apart from leaving it to a charity or a political party
# that it is mine in all but the deeds
# that i have long been named as being left the house upon his death,
- go any way towards proving to the IT that me ultimately owning the house legally in the future is not simply a deathbed gift, or a deliberate attempt to avoid IT if he signs it over while he's still here ... and therefore has some affect on the 7 year rule.
He feels its mine, that he gave it to me years ago, in fact that's why he bought the properties when we were little - because he wanted to be able to give us places to live.
so surely you can see that if he now puts the deeds in my name, it would not simply be a trick to get out of IT - because its just a formality - nothing would change for either of us, it has always been the intention.
xxxx
It's the deeds that matter
You haven't been named as getting the house - there's no will
It doesn't matter whether it's a trick to get out of IHT, a deathbed gift or anything else - it makes no difference
'Technically' (a word you've bandied about a lot with the meaning appearing to differ each time) there will be IHT if the estate is large enough if he doesn't survive 7 years. There's no way out of that apart from leaving it to a charity or a political party
FF - keep up ! The OP is going with her Dad to a lawyer
and that is, quite honestly, The Answer.
I can't imagine the lawyer will say: dont bother to make a will.
If Dad hasnt ever picked up a fountain pen, been to a bank, (paid tax), signed official documents ever of any sort..... [ I have my doubts about this ]
then the lawyer will check title. Liverpool is under the Land Reg regime - so title deeds are not the Mod Thing.
You must have realised that her house (hers in all but name) is more than 33% of the estate. and so There Is an advantage in putting it her name even now - it shuts up the other heirs - to - be who can otherwise say "we insist on selling the whole estate and dividing by three". ( I have been thro this - I did mention my grasping family).
By and large - I think ABers have done quite well.
and that is, quite honestly, The Answer.
I can't imagine the lawyer will say: dont bother to make a will.
If Dad hasnt ever picked up a fountain pen, been to a bank, (paid tax), signed official documents ever of any sort..... [ I have my doubts about this ]
then the lawyer will check title. Liverpool is under the Land Reg regime - so title deeds are not the Mod Thing.
You must have realised that her house (hers in all but name) is more than 33% of the estate. and so There Is an advantage in putting it her name even now - it shuts up the other heirs - to - be who can otherwise say "we insist on selling the whole estate and dividing by three". ( I have been thro this - I did mention my grasping family).
By and large - I think ABers have done quite well.
The answer to this amusing circular thread is that "no", none of the facts surrounding the situation will make any odds to the inclusion of the value of the house in his estate for Inheritance Tax purposes. It's his, not yours, and it will be counted unless he gives it away now. And it will have some relevance to his estates ultimate liability if he doesn't live another 7 years.
As an aside, if rent is not paid over, or is returned later or in kind by the payment of bills, then housing benefit claims were illegal, regardless of the genuine intentions to pay rent. Irrelevant to the issue in point though.
As an aside, if rent is not paid over, or is returned later or in kind by the payment of bills, then housing benefit claims were illegal, regardless of the genuine intentions to pay rent. Irrelevant to the issue in point though.
1. The house is your father's.
2. If he is the sole owner he can gift it to you if that is what he wants to do. If his wife is a joint owner, she would have to agree as well.
3. If he hasn't done so, he must make a will. So must his wife.
4. If he dies before his wife his IHT free amount is £325,000. If he leaves everything to his wife no IHT is payable when he dies unless he has made gifts in the 7 years before his death which exceed £325,000. If he has made no such gifts when his wife dies the IHT free amount is her £325,000 plus his = £650,000. If the estate is then worth less than £650,000 no IHT is payable. If it is worth more, then IHT is payable at 40% on the amount above £650,000 (not, as your post seems to say, on the full amount).
2. If he is the sole owner he can gift it to you if that is what he wants to do. If his wife is a joint owner, she would have to agree as well.
3. If he hasn't done so, he must make a will. So must his wife.
4. If he dies before his wife his IHT free amount is £325,000. If he leaves everything to his wife no IHT is payable when he dies unless he has made gifts in the 7 years before his death which exceed £325,000. If he has made no such gifts when his wife dies the IHT free amount is her £325,000 plus his = £650,000. If the estate is then worth less than £650,000 no IHT is payable. If it is worth more, then IHT is payable at 40% on the amount above £650,000 (not, as your post seems to say, on the full amount).
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