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Will and House Gift to Sons?
Comments
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seven-day-weekend wrote: »dunstonh, apparently the house is below the IT threshold, so they won't have to pay this?
If her assets are below the threshold for IHT, then it was pointless to sign the house over and thus incur a CGT liability for the sons. If her assets are over the threshold, by signing over the house but still living in it without paying rent, she has not avoided IHT because it is a "gift with reservation of benefit". She's caught on the deprivation of assets rule if she goes into care.
In, other words a total c*ckup.It's amazing how many people think they can outsmart the Revenue, which has, of course, seen it all before. :rolleyes:Trying to keep it simple...
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seven-day-weekend wrote: »dunstonh, apparently the house is below the IT threshold, so they won't have to pay this?
Correct. The IHT charge would have been zero (assuming no other assets). However, their "solution" has created a CGT chargeable event in the future in its place.
Basically by trying to be smart they have turned a nil tax position into one that could see around £30k CGT being payable.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
EdIvvestor and Dunstonh, yes I understand they've ended up worse than if they'd done nothing, it was just that Dunstonh mentioned they might have to pay IHT and it has been pointed out somewhere else that the house was worth £200k (i.e. below the threshold). So, that was what I was querying.(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0 -
it was just that Dunstonh mentioned they might have to pay IHT and it has been pointed out somewhere else that the house was worth £200k (i.e. below the threshold). So, that was what I was querying.
To clarify....
I said "You havent avoided inheritance tax as its a gift with reservation".
If that was the only asset then no IHT liability existed in the first place but their actions have made sure that the gift remains in the estate for future calculation purposes. The calculation may end up in a zero IHT position but it is not because of what they have done.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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