Inheritance tax and deductions when relating to property

holly_hobby

martindow wrote: »

From the OP, is the situation that your grandmother has died leaving grandfather living in the house? If so and she left everything to grandfather her IHT allowance is available and no tax will be payable for the house unless it is over 650k (2x325).

Available IF Granny didn't make any non-exempt tsfs during her lifetime, and IF Grandad's executor applies to HMRC for spousal unused IHT tsf (re Granny) on administering Grandads estate.

What you could do, is pay for repairs/upgrade etc, and this be formally recorded as a loan (for example repayable from Grandads estate on his death).

This means that the executor settles this debt, before any estate division is made to any beneficiares or the his estate is assessed for its net value and any IHT exposure.

Your solicitor will guide.

Hope this helps

Holly

raghavan

Hi, i am a foriegn national and have bought a property in uk for ukp 1.2 mn. this property is in the name of me and my 2 sons (both are major). i wish to understand inheritance tax liability in my case

please help

googler

raghavan wrote: »

Hi, i am a foriegn national and have bought a property in uk for ukp 1.2 mn. this property is in the name of me and my 2 sons (both are major). i wish to understand inheritance tax liability in my case

please help

Start a new thread in the Cutting Tax forum, then.... or hire a tax advisor - you sound like you can afford one.

kingstreet

raghavan wrote: »

Hi, i am a foriegn national and have bought a property in uk for ukp 1.2 mn. this property is in the name of me and my 2 sons (both are major). i wish to understand inheritance tax liability in my case

If purchased joint tenancy, the property is owned jointly and severally by all three of you and on death, it becomes the property of the surviving owners, with no Inheritance Tax liability as nothing falls into the deceased estate.

If purchased tenants in common, the deceased share passes into their estate with any/all other solely owned assets and IHT would apply after any nil rate band is taken into account.

Once you have established how the purchase was framed, you can then take advice, as googler suggested.

holly_hobby

raghavan wrote: »

Hi, i am a foriegn national and have bought a property in uk for ukp 1.2 mn. this property is in the name of me and my 2 sons (both are major). i wish to understand inheritance tax liability in my case

please help

IHT under UK HMRC, is based on you being deemed UK domicilie at the time of the transfer/death - which is based on several factors, but essentially is not the same as your place of residency (at death) or birth/nationality.

Only if you are deemed a UK domicile, will your estate (subject to several variants such as that of settled property os of the UK) be administered under UK IHT regs on death - your estate being the value of all property (where singularly held or the proportionate value if under any TIC arrangement), assets, chattels and money held by you - its the total net value that determines if your estate has exceeded the nil rate threshold. (currently 325k per person).

As you can see, it can be complex depending upon your personal circs (which I won't go into to save causing confusion), but certainly needs to be discussed with a qualified tax practioner/accountant - which I strongly advise you engage.

Hope this helps

Holly