Inheritance House Question

emmat1707

hi, I am looking at the best way to maximise inheritance for my family. I own a house approx value 600k and my daughter and her family have lived in it 8 years rent free the house is in my name. My husband passed away 3 years ago and everything was joint account's he had one account with approx. 50k.

My question is would I be best placed to leave the house and approx £400k to my daughter and her two children or would my husbands threshold cover this for our daughter?

Thanks so much.

Keep_pedalling

Assuming none of your husband’s allowances were used up on his death and you also own your home and it is worth at least £350k then your daughter can inherit £1M tax free from you, anything over that will be taxed at 40%. Any of your husbands unused nil rate band and residential nil rate band can be transfered to your estate.

Apart from your daughter and grandchildren who else stands to inherit from your estate?

benin

The daughter and family have been living in the house rent free for 8 years. Would HMRC expect the market rent for the last 7 years to be treated as a gift and deducted from the owners £325k nil rate band?

p00hsticks

OP, where are you living - in the house with your daughter or in a separate property, and if the latter is it owned or rented ?

Keep_pedalling

https://forums.moneysavingexpert.com/discussion/comment/81998003#Comment_81998003

That would only be the case if we were talking about the OP gifting her own home. They also still own the property their daughter lives in and it would probably not be a good idea to gift it now as it would result in a CGT liability for the OP.

emmat1707

I do not own the house I live in I am renting. If the money he had 50k was signed across to me would I lose that count as his allowance used?

Thanks for your help all!

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81998484#Comment_81998484

Where is that £50K sitting? whose name is on the account?

Also how old are you?

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/81998484#Comment_81998484

This is a curious state of affairs.

Your daughter already has the security of a bought and paid for home whilst you (unusally) are renting. However it seems you now wish to consider leaving £400k plus house to your daughter under the terms of the your will. Natural question arises that if your daughter is your only child why would you not leave all your assets to her, irrespective of IHT?

In passing I query the wisdom of you leaving the house jointly to daughter and grandchildren, creates problems for the grandchildren and a less than ideal situation for your daughter.

Please note since you do not own a residence at this time, unless you had downsized from the property now solely occupied by your daughter ( ie it used to be your own residence), it would appear that at best your estate would only benefit from a maximum of £650k of nil rate bands and no additional £175k residence nil rate bands available since on the sparse facts you have given there maybe no eligibility for the additional allowance .

Perhaps you can provide a bit more of the backstory so that the forum contributors can get a better understanding of what has happened and what you now wish to achieve by way of tax efficient future estate planning.