Knowledge and info needed on inheriting a house

kenzie123

Hello - can I ask who is the best person to speak to for advice and basic info on the process of inheriting homes, rules, taxes to consider etc?

Me and my sibling will inherit our family home when the time comes, and I have some basic questions:

Are capital gains taxes only applicable if SELL the property?

If we don't sell the property - do we still pay an inheritance tax?

As I already own a home, are there any costs I'd incur simply by inheriting a house?

I've read that a living trust could be an option but not sure what this means and what the pros and cons are - would this save us time and money later down the line?

Sorry this is vague but we are not sure on the process and trying to gain some knowledge so we are prepared - if there is an easy guide available that anyone knows about would be grateful if you could share.

Thank you

poppystar

Capital Gains would only be due if you sell for greater than the value at date of death (bear this in mind when getting values)

Inheritance  tax, if applicable, is paid on the value of the whole estate which would include the property. 

What are you planning to do with the property? 

km1500

if you inherit the family home then the estate will pay inheritance tax @40% on the total value of the estate (which will be the home plus anything else) less an allowance which you get

this allowance is 325k but can be boosted to 500k if it is the family home which is being inherited by a direct descendant eg son, daughter - which it sounds like it is

this 500k is doubled to 1m  if one parent dies, the second parent inherits and then subsequently dies later on.

you (ie the estate) would only pay inheritance tax if the estate value exceeds these limits

you would pay cgt on any increase in value from the date you inherited to the date of sale

Brie

I believe a living trust has to do with the deceased will stating that the property is to be inherited (for instance) by you and your siblings but that the deceased spouse had the right to live there until their own death or they decide to leave.  

So if dad owns the house and he dies, dad's children would inherit but mom could live there for the next however many decades.  Children wouldn't be allowed to kick mom out and also not really be able to sell either.  

Happy to be corrected on this if someone has a better explanation.