Inheritance tax

skronk

We own 1 house outright. We are building another. There is no debt/mortgage on either. The second will not be completed until after the sale of the first leaving us with one home at any time and hopefully avoiding tax. However if my father passed on and left us his home would the taxman class us as a 2 home owning family for tax purposes ?

Thanks

CLAPTON

If you father dies and his estate is over the IHT limit (312k or up to 624k if his estate can use his wife's allowance) then the estate will be liable to IHT.

Your principal private residence PPR is exempt from capital gains tax. If you build a second house and move into it from the first you have 3 years in which to sell the first one before you are liable CGT.

If some one leaves you a house that you subsequently sell as a profit (relative to probate value) then if you are not living in it as your PPR then you are liable to CGT.

skronk

CLAPTON wrote: »

If you father dies and his estate is over the IHT limit (312k or up to 624k if his estate can use his wife's allowance) then the estate will be liable to IHT.

Your principal private residence PPR is exempt from capital gains tax. If you build a second house and move into it from the first you have 3 years in which to sell the first one before you are liable CGT.

If some one leaves you a house that you subsequently sell as a profit (relative to probate value) then if you are not living in it as your PPR then you are liable to CGT.

Thanks Clapton.

Are you sure about the three year thing you quote when owning 2 homes ?

CLAPTON

yes

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4016337