How can my Dad gift me his house without paying both IHT and CGT?

Grannytobe

My Dad moved in with me a year ago and his house is standing empty - he is still paying the utility bills on it.  What is the tax implication if he gives it to me now rather than leaves it to me in his will - he would rather gift it now if he could and we would rather avoid paying both CGT and IHT

FlorayG

That's going to depend on what you plan to do with it once he gifts it

eskbanker

FlorayG said:

That's going to depend on what you plan to do with it once he gifts it

....and also the value of the house and the rest of his estate.

Bookworm105

he is not living in it and neither are you, so whether you own it or he does the CGT clock has already started ticking.

Keep_pedalling

There will be no CGT to pay if your father disposes of his house. IHT would only be an issue if his if his total assets exceeded £500k (assuming the house is worth at least £175k) and it could be up to double that if he is a widow.

If his estate would be subject to IHT then it would probably be a better idea to sell the house and gift out of the proceeds unless you really want to take in the burden of a second property.

If the house is his only major asset then he would be extremely foolish to give it away as it leaves him vunerable if anything happens to you and would also likely to be deemed as deliberate deprivation of assets if he ever needs a financial assessment for care costs.

xylophone

Presumably your father is not interested in becoming a landlord ( a burdensome responsibility at any age).


He can sell his home and save or invest the proceeds. https://www.gov.uk/tax-sell-home

Are you the only child and sole heir?

https://barrellison.co.uk/inheritance-tax-planning-how-to-benefit-from-the-residence-nil-rate-band/

Bookworm105

Keep_pedalling said:

There will be no CGT to pay if your father disposes of his house.

yes, but as it is not his main home any longer the clock is ticking the 9 months grace period away (assuming he moved less than 9 months ago of course)

Keep_pedalling

Bookworm105 said:

Keep_pedalling said:

There will be no CGT to pay if your father disposes of his house.

yes, but as it is not his main home any longer the clock is ticking the 9 months grace period away (assuming he moved less than 9 months ago of course)

I am assuming he had lived there many years so the gain would have to be pretty spectacular to overcome the amount of primary residence relief plus annual allowance. 

eskbanker

Bookworm105 said:

Keep_pedalling said:

There will be no CGT to pay if your father disposes of his house.

yes, but as it is not his main home any longer the clock is ticking the 9 months grace period away (assuming he moved less than 9 months ago of course)

I read it as the grace period having already expired:

Grannytobe said:

My Dad moved in with me a year ago and his house is standing empty

Bookworm105

Keep_pedalling said:

Bookworm105 said:

Keep_pedalling said:

There will be no CGT to pay if your father disposes of his house.

yes, but as it is not his main home any longer the clock is ticking the 9 months grace period away (assuming he moved less than 9 months ago of course)

 plus annual allowance. 

without info on values "we" cannot categorically state that there is no CGT