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Who Pays Any Rent ?
3 Answers
My house is jointly owned by myself and my two daughters. I own half of it and daughters own a quarter each. I live in it but my daughters don't .
They have their own homes.
Originally the house was owned jointly between myself and my wife but when she died 18 years ago, she bequeathed her half to my daughters.
No problem in any of that except my solicitor now tells me my daughters will be liable for capital gains tax on the increase value of their share and I should have been paying them rent , at the market value, for their share of the house for the past 18 years.
This has come to light because I'm 87 , it was necessary to make a new will and the question of inheritance tax has to be considered , especially with the inflated value of property.
Is my solicitor correct ? It doesn't seem right to me . Why should a landlord be forced to charge rent. ?
They have their own homes.
Originally the house was owned jointly between myself and my wife but when she died 18 years ago, she bequeathed her half to my daughters.
No problem in any of that except my solicitor now tells me my daughters will be liable for capital gains tax on the increase value of their share and I should have been paying them rent , at the market value, for their share of the house for the past 18 years.
This has come to light because I'm 87 , it was necessary to make a new will and the question of inheritance tax has to be considered , especially with the inflated value of property.
Is my solicitor correct ? It doesn't seem right to me . Why should a landlord be forced to charge rent. ?
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I do not think it is anyone's business whether you pat rent or not. Maybe there is a tax advantage in in which case maybe the finance or law forums may have been a better bet.
A solicitor ought to know their stuff. I guess your daughters would probably be attracting CGT as it is not their main home. But only on the increase and subject to the normal annual tax free allowance.
I think a financial adviser is best to say what the next best step to minimise tax, is.
A solicitor ought to know their stuff. I guess your daughters would probably be attracting CGT as it is not their main home. But only on the increase and subject to the normal annual tax free allowance.
I think a financial adviser is best to say what the next best step to minimise tax, is.
When my Aunts husband died 10 years ago he left his half of their house to his two children (from his first marriage), so my Aunt owned half the house, and the children a quarter each. I know that she never paid either of them any rent and when she sold the house last year no-one said anything about anyone paying tax. She just sold, took her half, and her step children their respective quarters. Oops - maybe I should keep quiet about this.
Thanks for you comments ! The whole question of Inheritance Tax is a mess especially in the South East and London Area where the value of even a small modest house alone exceeds the £320,000 IHT threshold . So even ISAs are taxed at 40%. Cameron wanted to increase the threshold but was prevented by the LibDems and Labour from doing so.
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