Inheritance tax

Boohbah

As i understand it, the threshold on inheritance tax, regarding property stands at £263k.

The property I alone live in is worth £300k.

I don't intend passing on just yet but, when I do, how can I prevent my daughter becoming liable to inheritance tax and capital gains tax on said property.

Is there some truth in the fact that I can sign over the deeds of my house to her now, and provided I don't pop off within the next 7 years, she will be free of all tax's.

If anyone has had any experiences of this situation, I would be grateful for there input.

lisyloo

Is there some truth in the fact that I can sign over the deeds of my house to her now, and provided I don't pop off within the next 7 years, she will be free of all tax's.

Well there's some truth in it, but as always there are a lot of buts.

If the gift comes with a condition that you can continue to live there then it isn't a true gift.
It's called a "gift with reservation" and there are different tax rules that apply to these so I don't think you will find it that easy.

Also if you need long term care and the local authority think you might have done it to avoid paying fees for long term care then they can get a court order to take the house back from your daughter (and there is no safe time limit for this).

Also bear in mind what might happen if you fall out with your daughter. She might want you out of the house. This might sound inconceivable but she could be the victim of mental illness, divorce or even her death.
If she got divorced then a spouse could possible force her hand in selling the house.
Also her beneficiaries might want it sold on her death.

So no, I don't think it's that simple just to sign it over.
There's an awful lot of things to consider.

Other possibilities open to you are downsizing as you get older (move to a smaller house and give her some of the cash - without any reservations).
You may find as you get older that you will need a smaller property anyway.

Boohbah

Thanks for your swift reply lisyloo.

You've raised a lot of point's I hadn't even thought of!

Downsizing isn't a possibility at the mo, as I have a lodger, and I need him for the additional income. But certainly something to keep in mind for the future.