In inheritance tax

patsy43

Are estate being worth   2 houses     570,000.00

Plus   85,000.00  cash which I what to give to my daughter as a deposit on a house

I well have full inheritance tax allowance and will inherit my husband allowance as well or other way round

Will they be tax to pay on 85,000.00 paid to daughter

Keep_pedalling

No, but it would be unwise to give all your cash away without leaving yourself a decent emergency fund. 

SiliconChip

Are you prepared to sell one of your houses should you need to fund personal care in the future? Giving away all of your cash could be seen as deprivation of assets.

p00hsticks

When are you intending to give the cash to your daughter ?
If it's in your will, or you die within seven years of making the gift, then I think that it could reduce the allowance that you pass on to your husband if you predecease him ?

Albermarle

Is one of the houses your home and will this be passed onto your daughter on second death?
If this is the case, then on second death you can pass on up to Million Pounds without any inheritance tax. So the gift will be irrelevant in this case.

However as already said, you should make sure you have adequate money, pensions etc to look after yourself before giving too much away.

patsy43

we are selling house 2 to my daughter giving her the 85000 profit she is having the mortgage for rest to pay off are cost and mortgage we live in house 1 and have good pensions and buffer fund just need to know we could give daughter the 85000 profet with out paying tax

Bookworm105

patsy43 said:

we are selling house 2 to my daughter giving her the 85000 profit she is having the mortgage for rest to pay off are cost and mortgage we live
4, in house 1 and have good pensions and buffer fund just need to know we could give daughter the 85000 profet with out paying tax

that is very different to what you said you were doing in your first post!
It means the answers above so far do not cover your actual tax position, as this is no longer just about potential inheritance tax, it is about you selling a second property whilst still alive. The answer is there will be CGT to pay by you on the sale of house 2

In summary: you own 2 houses: House 1 which is your main home and House 2 which is not your main home.  Daughter is buying House 2 from you, and the price she is paying is discounted by the £85,000 "profit" you have made on your investment property (house 2). She will then pay the rest to you in cash which she will fund by a mortgage in her own name. (It is irrelevant that you will use her cash to clear your own remaining mortgage on it).

1. You are liable for capital gains tax now on the profit made from sale of house 2 (it is not your main home). 

2. Your daughter is a "connected person", therefore in tax terms, your CGT liability is based on the open market value of house 2, not the discounted cash price you need her to pay. 

3. Have you ever lived in House 2 as your main home at any point in your ownership of it?
- IF NOT, then you will have to pay CGT on the gain between its current market value and your original purchase cost within 60 days of selling it to your daughter. The taxable profit may therefore be more than the £85,000 you think it is.
- If you have lived in it, then your CGT liability will need to be calculated differently 

4. The £85,000 discount (or more if market value is higher) will also be treated as a potentially exempt transfer for inheritance tax - ie the 7 year rule applies to it since it is a gift from you to her.

5. If you have ever lived in House 2 whilst simultaneously owning House 1, then house 1 loses some of its current CGT main home exemption and would be partially liable for CGT if you ever sell it