Wills Scottish Law only

outlaw777

Hi I hope you are well. If a parent has 2 children and wants to leave the family home/property to both children as 50/50 would this be the best option to write in the will or would it be best to instruct the property to be sold? Asking this as want to avoid inheritance tax and capital gains tax and unsure about how these taxes would affect everything? 

Keep_pedalling

It is usually a bad idea to specify a particular property in a will as a lot can change between making it and your death. The simplest thing to do is just to leave your estate equally between the 2 children and regardless of what the estate consists of when the time comes it will be split evenly. It makes no difference to IHT how you divide the estate with them. CGT is not something to worry about.

If you are concerned that your children might argue about whether to sell or not you could put a clause in your will that any home you own at the time of your death should be sold and the proceeds split evenly. 

outlaw777

So of the property is split equally between the 2 children will they have to pay any inheritance tax or capital gains tax? Also what if the children decide to then sell the property what are the tax implications? 

Keep_pedalling

outlaw777 said:

So of the property is split equally between the 2 children will they have to pay any inheritance tax or capital gains tax? Also what if the children decide to then sell the property what are the tax implications? 

If inheritance tax is due then it will be paid by the executor before they distribute the estate, beneficiaries don’t pay it. Capital gains only applies if it takes a long time to wind up the estate and there is a significant increase in value between date of death and the date sold.

The estate is going to have to be quite large before IHT is something to worry about (£500k if they were divorced or never married, and up to double that if they had been widowed)