Gift of land

Nenkaman

My mother is insistent on gifting my sister & I a peice of her farmland, 12.5 Acres, she is not well, and we will probably lose her this year, my question is, what if any, are the tax liabilities on the gift from Mother? 

naedanger

The value of the land she gifts you and your sister will be added back to her estate on her death assuming it is in the next 7 years. And the estate is then subject to the normal inheritance tax rules (so if her estate is over the IHT threshold then the estate will pay IHT on the value of this gift just as it would have done had the gift never been made). In effect there won't be any tax advantage in gifting the land but nor will there be any tax disadvantage.

The other consideration is if she needs any means tested benefits or care costs then these will be assessed assuming she had not made the gift under deprivation of assets rules (but I am guessing they are not relevant to her situation).

Keep_pedalling

If she only has a short time to live there is no tax advantage or disadvantage in making this gift. The land may be exempt from IHT through agricultural relief, which still applies if she gifts the land before she dies.

pphillips

If she were to survive the gift by the gift by 7 years, it would leave your mother's estate which means that the land would only benefit from hold over relief for CGT purposes on the original purchase price. This is very likely to be less favourable than a CGT reset from the date of death, combined with IHT agricultural property relief, that would have applied if the gift was still included in your mother's estate.

Marcon

See https://www.gov.uk/guidance/agricultural-relief-on-inheritance-tax