Buying a share in my mums house - tax implications?

Jamesinthedam

Hi members

Four years ago I helped my mum pay off the last of her mortgage (about 90k). We signed a legal contract in which she pledged a 20% share of the house. The while property is worth about 700k. My question is whether I would be better from an inheritance tax point of view to have the title to my 20% share formally signed over to me in the property deeds in order to protect it from inheritance tax if she passes away. Or is this irrelevant?

Thanks for your thoughts

James

steampowered

What do you mean when you say your mum "pledged" a 20% share of the house?

You can't "pledge" a share of a house to someone else. What is the name of the legal contract that was signed? If you signed a deed of pledge you may find that it doesn't do what you think it does.

00ec25

Oh dear, DIY tax planning. So......

1. You have a documented "beneficial interest" of 20% of the value of the property

2. Do you live in that property as your main home? Yes or No?

Go and get professional paid for inheritance tax planning. With an estate worth 700k+ your mother needs it and you need it in respect of your potential Capital gains tax liability arising from that interest.

G_M

As others have said, you need professional advice.

On Inheritance tax AND Capital Gains Tax.

Was the 20% she gave you

a) a gift
or
b) repayment of the loan you gave her when she paid off the mortgage

This could impact on the IHT position too.