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    • scrub
    • By scrub 16th May 17, 1:52 PM
    • 134Posts
    • 10Thanks
    scrub
    Inheritance question inc flat
    • #1
    • 16th May 17, 1:52 PM
    Inheritance question inc flat 16th May 17 at 1:52 PM
    My mother's estate is under £325,000 which includes her flat.

    Is there any advantage of putting the flat in my name now if she were to live another seven years?

    Or with estate being under the limit, would there be no tax advantage?
Page 1
    • Mojisola
    • By Mojisola 16th May 17, 2:08 PM
    • 28,008 Posts
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    Mojisola
    • #2
    • 16th May 17, 2:08 PM
    • #2
    • 16th May 17, 2:08 PM
    If she gives it to you and continues to live in it without paying you rent, it would still be included in her estate for the inheritance tax assessment.

    If the flat increases in value before you sell the flat, you may have to pay Capital Gains Tax.
    • LindaMary
    • By LindaMary 16th May 17, 2:37 PM
    • 177 Posts
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    LindaMary
    • #3
    • 16th May 17, 2:37 PM
    • #3
    • 16th May 17, 2:37 PM
    And if she goes into care...
    • DigForVictory
    • By DigForVictory 16th May 17, 3:35 PM
    • 6,931 Posts
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    DigForVictory
    • #4
    • 16th May 17, 3:35 PM
    • #4
    • 16th May 17, 3:35 PM
    Plus you'd be her landlord & that is not a challenge free situation.
    • Mojisola
    • By Mojisola 16th May 17, 3:41 PM
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    Mojisola
    • #5
    • 16th May 17, 3:41 PM
    • #5
    • 16th May 17, 3:41 PM
    Is there any advantage of putting the flat in my name now
    Originally posted by scrub
    If you needed to claim means tested benefits in the future, the flat would be assessed as capital and you'd be refused.

    If you went bankrupt, the flat would have to be sold - where would your mother live then?

    If you married and divorced, the flat would be included in the financial settlement and, again, may have to be sold.

    Still thinking it's a good idea?
    • Keep pedalling
    • By Keep pedalling 16th May 17, 4:09 PM
    • 3,451 Posts
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    Keep pedalling
    • #6
    • 16th May 17, 4:09 PM
    • #6
    • 16th May 17, 4:09 PM
    The fact that your mother owns property that will presumably be left to you, adds another £100k to add to her nil rate band, assuming the flat is worth that much. If the flat is worth under £100 the the whole value of it will be IHT exempt.

    There are no tax advantages for doing this only dangers for you mother, should you meet with in untimely death or financial catastrophe.

    Don't forget if she is a widow any unused nil rate band can be carried over from her husband, but whether that is the case or not it sounds like she is a long way from needing any form of IHT planning.
    • kidmugsy
    • By kidmugsy 16th May 17, 11:06 PM
    • 9,475 Posts
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    kidmugsy
    • #7
    • 16th May 17, 11:06 PM
    • #7
    • 16th May 17, 11:06 PM
    Is there any advantage of putting the flat in my name now if she were to live another seven years?
    Originally posted by scrub
    This scheme consists entirely of disadvantages. About the daftest thing one can do with regard to IHT is amateur fannying about with property ownership.

    As others have said, your mother's estate is anyway too small for IHT "mitigation" to make any sense.
    • scrub
    • By scrub 18th May 17, 1:48 PM
    • 134 Posts
    • 10 Thanks
    scrub
    • #8
    • 18th May 17, 1:48 PM
    • #8
    • 18th May 17, 1:48 PM
    The fact that your mother owns property that will presumably be left to you, adds another £100k to add to her nil rate band, assuming the flat is worth that much. If the flat is worth under £100 the the whole value of it will be IHT exempt.

    There are no tax advantages for doing this only dangers for you mother, should you meet with in untimely death or financial catastrophe.

    Don't forget if she is a widow any unused nil rate band can be carried over from her husband, but whether that is the case or not it sounds like she is a long way from needing any form of IHT planning.
    Originally posted by Keep pedalling
    Thanks. Under the new scheme, it didn't actually look worth it but wanted to check mainly from a tax perspective.

    I am aware I had to charge rent etc if I were to take ownership which isn't a problem as I'm already a landlord. It was the Capital Gains I was thinking of and the knock-on affects of owning my mother's property.

    Relieved it's not worth it though.
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