Reply to: Inheritance Tax

[xoggoth]

Yeh really fecking irritating. Not as rich as you of course (who is?) but would end paying lots for stupid chavs if I pop my clogs tomorrow. See that thing on front page of the DT today? Average income for working couple with no kids has gone down 4% since 1997, non-working couple with kids up by 15%. Says everything about Britain.

PS Ah yes, I see you did as you mention the article in a thread further down (but not that particular bit)

[oraclesmith]

Small detail but they only actually own half the house each if they are tenants in common. (Difference between tenants in common and joint tenants however is only really important in the case of marriage or civil partnership - not likely for sister!).

If the house was the surviving sisters PPR then CGT would not be payable on the sale. In any event it is the estate selling the house so CGT is not payable anyway.

I don't actually know what's on their deeds. I just heard that they owned half each on the radio. They may be wrong.

[Ardesco]

Lovely idea but if you cop it in 7 years all the money you have given them is liable for IHT and you also have to be careful, some of the ungrateful little scroats will then kick you out the house, laugh at you and spend all your hard earned cash while you live on the streets....

[ChimpMaster]

Plus that would be disallowable for IHT purposes if you continued to live in the house without paying the new owner a commercial rent.

OK so sell the house and give your children the cash to buy a new house for themselves, and then go live with them!

[ASB]

They actually own half the house each, so the surviving sister inherits only half, to add to the half they already own. The inheritance is £400k. If the survivor sells the whole house to pay the inheritance tax bill, though, they might have to pay CGT.

Small detail but they only actually own half the house each if they are tenants in common. (Difference between tenants in common and joint tenants however is only really important in the case of marriage or civil partnership - not likely for sister!).

If the house was the surviving sisters PPR then CGT would not be payable on the sale. In any event it is the estate selling the house so CGT is not payable anyway.

[Lucifer Box]

Plus that would be disallowable for IHT purposes if you continued to live in the house without paying the new owner a commercial rent.

[_V_]

Why not plan ahead and deal out your assets to your siblings more than 7 years before your death. Therefore this counts as a gift and is not eaten up by IHT.

Yes of course you can't plan 7 years before your death but the sooner you make the transfer of funds/assets the greater the likelihood of exceeding this term.

Yes great. I'll give my home to my children now shall I? I'm sure an 11 yr old will be pleased.

[Lucifer Box]

If the survivor sells the whole house to pay the inheritance tax bill, though, they might have to pay CGT.

Although as has already been noted, this is not allowable as a matter of law.

[wendigo100]

They actually own half the house each, so the surviving sister inherits only half, to add to the half they already own. The inheritance is £400k. If the survivor sells the whole house to pay the inheritance tax bill, though, they might have to pay CGT.

OK, I'm with you now.

[oraclesmith]

How did you calculate 46K? On an 800K house I make it nearer £206K!

They actually own half the house each, so the surviving sister inherits only half, to add to the half they already own. The inheritance is £400k. If the survivor sells the whole house to pay the inheritance tax bill, though, they might have to pay CGT.

[ChimpMaster]

Why not plan ahead and deal out your assets to your siblings more than 7 years before your death. Therefore this counts as a gift and is not eaten up by IHT.

Yes of course you can't plan 7 years before your death but the sooner you make the transfer of funds/assets the greater the likelihood of exceeding this term.

[wendigo100]

If it's the same case as I heard, the surviving sister would have to pay 40% of the figure over the £285k on half the house. I think the house is worth about £800k so this means about £46k in tax which, being elderly, they won't have the income to pay or be able to take out a mortgage, so will have to sell the house. Mind you, the survivor would then have £756k left to buy a new house. It would be the same situation if they had separate £400k houses next door to each other.

If they're successful, then I don't see why the parent-child inheritance path shouldn't also be free of inheritance tax.

How did you calculate 46K? On an 800K house I make it nearer £206K!

[Lucifer Box]

It was announced in the last budget.

Predicatbly though it all seems to have gone very quiet about the implementation details.

No great surprise there. Not charging interest from the moment the owner of the estate carks it would be tantamount to a tax cut. Likewise allowing people to use the estate to pay the tax due would be an unprecedented attack on the finance industry.

To be quietly forgotten after a bit of backroom lobbying by the loans industry methinks.

[John Galt]

Gordon Brown reminds me of a hyena - complete scavenger that laughs while he's ripping your throat out

[ASB]

I'm sure there's no great haste attached to that change.

It was announced in the last budget.

Predicatbly though it all seems to have gone very quiet about the implementation details.