LISA and inheriting a share in property

noclaf

Hi All,
I currently fall under the 'First time buyer' category and have been saving into a cash LISA for a couple of years. It has 3 years worth of my contributions and 3x govt bonus for each year I contributed.
If I was to become an owner on half of a property* by way of inheritance due to a parent passing away what implications does this have on my LISA? Does it automatically mean I can no longer use the LISA to buy a property and that I would lose the govt bonuses if I removed the funds for a property deposit? I am aware that of I leave the funds as they are then can retain the govt bonus for pension I believe but as I opened the LISA to build a property deposit trying to understand it in that context.

*Half of a property - probably not a good description. In layman's terms one parent passing their 50% equity in a property to myself.

MovingForwards

No FTB perks when you inherit a share / whole property.

getmore4less

*Half of a property - probably not a good description. In layman's terms one parent passing their 50% equity in a property to myself.

Typically that is done with a life interest to the other parent so you don't actually inherit anything at the time of the first death.

AdrianC

Get the will varied, and allow your other parent to retain that half.

If the property is/was owned as joint tenants, then it's academic, because you won't have inherited anything as that parent's share will simply have ceased to exist separately as they breathed their last.

noclaf

Just to add: parents are divorced and property was owned as 'tenants in common'

noclaf

Just to add: parents are divorced and property was owned as 'tenants in common'...probably because at time of divorce each parent wanted their half to pass to me..as opposed to each other when it's joint tenants.
Also one of my parents recently passed away hence asking the question now. Probate will take a while I think so until then nothing changes I presume. From a practical standpoint, in terms of who lives in the property nothing else will change for now.

xylophone

This is the property which you currently occupy with your mother.

You mentioned that your father's will left  all his assets to you and your sibling.
https://forums.moneysavingexpert.com/discussion/6195401/probate-and-solicitors-specialists/p1

He has a will, 2 executors listed are my half sibling and another family member

Beneficiaries listed in will are my sibling and I.

There is no interest in possession clause in your mother's favour?

If the will were varied to grant an IIP, you and your sibling would become "remainder men"
 As legally you  would be only the  remainder men of this trust, and  would not not have an absolute interest (or an interest in possession in your favour)

https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem6212

 you  would not have either a legal or equitable interest in the property itself: the life tenant's interest  would have to expire first.

You would therefore still count as a first time buyer?

noclaf

Hi Xylophone,
You have correctly linked the two.
To confirm, my mother is not mentioned at all in my father's will nor is there a reference to an IIP. For context my mother's will expressly stated nothing from her estate would go to my father, wording to that effect.
The absence of an IIP was probably influenced by the separation situation at the time.

getmore4less

Your choice. 
Does your mum want to continue living there?

Sell.
You could give her an interest in possession till sold or for life. 

She could buy you out.

noclaf

getmore4less said:

Your choice. 
Does your mum want to continue living there?

Sell.
You could give her an interest in possession till sold or for life. 

She could buy you out.

Sorry for the late reply just seen this.
I am her carer and live with her so will continue to do so untill it's not practically possible to continue or care home needs to be explored ( her condition is progressive so whilst I can manage then the current setup will continue).

noclaf

Rather than start a new thread thought I'd post another question here on inheritance tax.
I believe (but need to confirm) that my father's total estate will be within the threshold (325k or is it 500k now?).
My parents house mortgage is "paid" but there is a small balance remaining circa £100 I believe. Does this have a bearing on inheritance tax?