Capital Gains Tax // Inheritance Tax

Ann_Reed

My elderly relative has made his will out to me and my brothers. He is not paying his council tax. We are going to pay the arrears and any future council tax and probably other expences related to owning a property for the next two years. We know there is inheritance tax to pay. The property is valued around 400k. If we can produce evidence that we have keep up payment of the liabilaties owed would this be taken off the capital gains tax value, and how would it affect the inheritance tax, would it drop the value down.
Should we try and get our names on the land ownership deeds once we start paying his expences? eg if we intend to put 10k into expences should we try to get 10% of the property value signed over to us.
I beleive that if you sell your inheritance property before two years from the date of inheritance there is no capital gains tax to pay. Is this correct.
The property consists of 10 acres with a double miners cottage on it [around 180 years old]. I beleive that land size has to be under 2 acres to qualify for the above.
Capital Gains Tax. What rate is this payable at should we have to pay?
Please give example.
Inheritance tax. If he makes out Deed of Gift and he survives 7 years we dont have to pay. We are 2nd cousins would ths make a difference to any inheritance tax payable.
Thanks everyone who has taken time to read this a give their experiance or share their knowledge with me. I am very grateful. I live in New Zealand.

whatatwit

Hi ann, there is a whole board for tax advice, and there are some smart cookies on there who are clued up on tax.
One of the mods may move your post over there.

In view of the size of the potential estate, you may be as well seeking professional advice, especially as you are not a UK resident.

good luck.

tyllwyd

This isn't something where you can rely on advice on a forum like this - you need proper advice from a solicitor who is qualified to deal with UK matters - and someone who can also advise you on the tax situation since you are not in this country.

I'm not a lawyer so I don't know, but I don't think that whether or not you pay his expenses makes any difference to the capital gains tax or inheritance tax issue. Whether or not you are related to the deceased also doesn't make any difference.

Inheritance tax is payable at 40% of any money above £285,000. Capital gains tax is payable at various rates up to 40%.

If you make a gift and then live for at least seven years afterwards, then it should be exempt from inheritance tax. BUT there is something fairly new called a gift with reservation of benefit, and I think if he continues to live in the house then this will apply.

I really really think you need to get proper advice on the best way forward or you could end up in a terrible muddle.