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ChatterBank5 mins ago
Inheritance
7 Answers
Hi folks.
My Dad is about to move houses and will make a sizeable profit in doing so.
He has therefore decided to split some of what he will make between myself and my brother.
Will this be subject to some sort of tax?
I need to know so I can plan ahead.
TIA
My Dad is about to move houses and will make a sizeable profit in doing so.
He has therefore decided to split some of what he will make between myself and my brother.
Will this be subject to some sort of tax?
I need to know so I can plan ahead.
TIA
Answers
1 to 7 of 7
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It doesn't matter where his wealth is when he dies, just how much there is. If it is over the threshold for IHT it will have to be paid and any gifts he made within 7 years of his death can be included. The bottom line is: keep some of his gift aside just in case he suddenly pops his clogs and HMRC come looking to you for the tax due. Look up IHT on the gov.uk website if you want accurate details.
In case you're getting confused between Capital Gains Tax (CGT) and Inheritance Tax (IHT) . . .
There is no tax to be paid on the profit made from selling a house as long as it was the person's sole (or main) residence. IHT only applies to profits on second homes, buy-to-let properties and similar.
As has been indicated, if your father dies within 7 years of gifting money (over certain specified thresholds) to you, your brother or anyone else, when his estate is totalled up for the purposes of assessing any IHT to be paid upon it, those gifts (or part of them, depending upon how long had passed since the gifts were made) will be included in the calculation. That doesn't automatically mean that there will be any IHT to pay though. IHT only cuts in on that part of an estate beyond a threshold of £325,000. (If your father's wife predeceased him, leaving him all of her estate, then the first £650,000 of his estate will be free of IHT).
There is no tax to be paid on the profit made from selling a house as long as it was the person's sole (or main) residence. IHT only applies to profits on second homes, buy-to-let properties and similar.
As has been indicated, if your father dies within 7 years of gifting money (over certain specified thresholds) to you, your brother or anyone else, when his estate is totalled up for the purposes of assessing any IHT to be paid upon it, those gifts (or part of them, depending upon how long had passed since the gifts were made) will be included in the calculation. That doesn't automatically mean that there will be any IHT to pay though. IHT only cuts in on that part of an estate beyond a threshold of £325,000. (If your father's wife predeceased him, leaving him all of her estate, then the first £650,000 of his estate will be free of IHT).
1 to 7 of 7
