Can part ownership by a son reduce IHT on a property?

xylophone

The house was bought pre 1988 - the brother and sister-in-law appear to have bought their percentage share for the sole use of a dependent relative and no rent has been paid - (see links in previous post).



A possibility of dependent relative relief in respect of CGT? Worth checking with HMRC?

Keep_pedalling

It sounds the OPs mother has significant savings, so assuming she is in good health the potencial CG could be negated, by the mother buying out brother and SIL in stages over 3 years.

Kernel_Sanders

xylophone wrote: »

The house was bought pre 1988 - the brother and sister-in-law appear to have bought their percentage share for the sole use of a dependent relative and no rent has been paid - (see links in previous post). A possibility of dependent relative relief in respect of CGT? Worth checking with HMRC?

Your link states Dependent relative relief meant that if you bought a property for an elderly (generally taken as 65 and over) or infirm relative, yours or your spouse's, and they lived rent-free, you did not have to pay CGT when it was sold.
Mother was only 59 when widowed, and in no way infirm. A good call, though.

Savvy_Sue wrote: »

I thought the OP was asking from a position of ignorance: they don't know what arrangements were made when this happened, and don't know what possibilities there were for arranging things to lessen future tax implications, and wondered if there were any since brother is adamant that whatever the OP is worried about is not an issue.
Of course, even if something highly tax efficient was done then, it may not still be tax efficient today.
Now, we don't know what arrangements were made then, and the only way the OP is going to find out is to ask: was a trust set up? what documents exist? but since brother wasn't particularly receptive to these enquiries the way forward might be to suggest that both mother and brother should review wills and do some tax planning, after taking professional advice, because things have changed since the '80s. However, brother may well take the view that these things are none of the OP's business, and that is true.

Thank you so much for this, Sue. You have analysed the situation perfectly and made an explanation so clear and detailed that even Agrinnall will be able to understand it!

jimmo

Kernel_Sanders wrote: »

Your link states Dependent relative relief meant that if you bought a property for an elderly (generally taken as 65 and over) or infirm relative, yours or your spouse's, and they lived rent-free, you did not have to pay CGT when it was sold.
Mother was only 59 when widowed, and in no way infirm. A good call, though.

Its still a good call.
http://www.hmrc.gov.uk/manuals/cgmanual/CG65570.htm