CGT and IHT when living in a family property

cleve_2

We are planning to move into the family home and my parents would like to sign over the mortgage free house to my wife and I to prevent us being forced to sell it due to the ridiculous amount we would be liable for IHT in the future. Can anyone advise on the following:

1. Would we have to pay CGT on our own mortgaged property if we sell it in 2 years time as it would no longer be our main residence (probably rent it out and my mum is joint tenant on our mortgage).
2. Should our relatives not survive the 7 year IHT period, would we be better off in terms of IHT with the family home as joint tenancy or tenants in common with them or for it to solely be in our names (mine and my wifes)?
3. What exemptions are there for nursing home fees if it ever applied if we are living in the property with them?
4. What exemptions are there if they were to die before the 7 year cut off for IHT if we jointly/independently own and are living in the property?

Any basic advice would be appreciated as we have just started to look into it and seems to have opened a can of worms!

noh

If your parents gift you the house and continue to live in it then the value of the house will still be included in their estates.

Are you sure that there will be a "ridiculous amount of IHT" to pay in the future.?

cleve_2

Are you sure that there will be a "ridiculous amount of IHT" to pay in the future.?

Because of an attached business which we will have nothing to do with.......yes :-(

noh

Then in that case I suggest your parents take professional advice from someone with experience in estate planning.
You could contact a STEP practioner http://www.step.org/searchuser.pl?n=1000

CLAPTON

cleve wrote: »

Because of an attached business which we will have nothing to do with.......yes :-(

why would you have to sell the house if its the business that has the value?

CLAPTON

as far as CGT on your own propety is concerned, the period of residence is tax free as is the last three years
so it you sold in 2 years time then there would be no CGT

also if you rent it out then there is a letting allowance (max 40,000)

noh

You really do need to consult a relevant professional.
As far as I am aware there is IHT relief on relevant business assets up to 100%
http://www.hmrc.gov.uk/cto/customerguide/page16.htm#b

So your perception of the amount of IHT potentially due may be way off.