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IHT, CGT, Gift/GROB - where do we stand
ChrisB_Cremes
Posts: 1 Newbie
myself and my wife bought half of MILs house. MIL gifted my wife the other half of her main residence. leaving me owning 25%, my wife 75% and MIL 0%
the house is our primary and only residence, MIL lives with us, but isnt paying rent.
where do we currently stand from IHT - obv the part we bought is exempt, but the gifted part - its 4 years of the 7 gone, but as she isnt paying market (or any) rent does that mean that the half still comes under her estate, so the gift is in essence null and void, or just means that its under her estate and when the time comes, the other half is ours, but it just comes under the IHT bracket
CGT - this one is coming up due to the potential upcoming changes with the budget, but could we be liable for CGT (depending upon value thresholds) from the gift even though its our primary residence?
the house is our primary and only residence, MIL lives with us, but isnt paying rent.
where do we currently stand from IHT - obv the part we bought is exempt, but the gifted part - its 4 years of the 7 gone, but as she isnt paying market (or any) rent does that mean that the half still comes under her estate, so the gift is in essence null and void, or just means that its under her estate and when the time comes, the other half is ours, but it just comes under the IHT bracket
CGT - this one is coming up due to the potential upcoming changes with the budget, but could we be liable for CGT (depending upon value thresholds) from the gift even though its our primary residence?
0
Comments
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On the IHT side, as the MIL is still benefitting from living in the house for free, it does not count as a 'Potentially exempt gift' .
So it will be counted back into her estate for IHT purposes regardless of when she dies .0 -
1. First of all the bought part - you say obvs it is IHT free but presumably you paid the MIL whatever the market value was so she had that 'cash' and whatever remains when the day comes will count towards her IHT allowance. If you didn't pay her or if you paid less than market value than the difference will be counted as a gift
2. As stated above because she is still living in the house then it will never drop out even after seven years so the full amount of the gift will count towards her IHT allowance0
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