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Family Home being sold (Read 5876 times)
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Family Home being sold
Feb 2nd, 2013 at 11:30am
 
Hi,

I have a few questions that I would appreciate some advice/answers on. I am based in Scotland

OK so here goes my mother died 6.5 years ago and my Dad's inheritance tax allowance was doubled as my mums share was transfered. So his allowance is currently 650k.....his estate is under that.

So my dad is planing on selling the family home and splitting this 3 ways between me, him and my brother.....so first question if this sold for approx 330k that would be 110k each can this just be gifted?

Next he is looking to buy 50/50 with his new partner, we are looking to somehow get an agreement set up where by if for example my father died first then his 50% would transfer to me and my brother BUT we wouldn't be able to get the cash, sell or throw anyone out until the other holder of the 50% agreed i.e his new partner....is this possible?

Finally what happens if he decided to get married in say 6-12 months time?
Would his double inheritance allowance be scrapped?
Would me and my brother be taxed on our share of the family home? Would any agreements set up on his new property with his new partner then become void?

Hope this all make sense to someone out there
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Re: Family Home being sold
Reply #1 - Feb 2nd, 2013 at 2:04pm
 
So the below answers the first question he can gift this too us with no issues as his allowance currently stands at £650k which he is no where near.  He is fit and well enough and is downsizing so  deprivation of capital shouldn't come into play

Inheritance tax
The main concern for many parents gifting money is that their children will face an inheritance tax bill should they pass away.

Inheritance tax sees the government take a slice of your estate before itís passed on to your loved ones; it is also applied to any monetary gifts you give in the 7 years preceding your death.

Your estate (the property, possessions and savings you leave behind) is valued when you pass away.

The first £325,000 of anything you own escapes inheritance tax (itís referred to as the nil rate band), however any amount over this is taxed at 40%.

For example, say your estate is valued at £425,000, the first £325,000 of this would escape inheritance tax. However, £100,000 of its value would be taxed at 40% so the tax man would claim £40,000 before the balance is passed to your next of kin.

The exception to this is if you are married as you can pass your full estate to your spouse in the event of your death without paying any inheritance tax.

By doing this you also pass on your £325,000 inheritance tax exemption, so £650,000 of your combined estate would remain free from inheritance tax on their passing.

The inheritance tax threshold was frozen at £325,000 in 2010 and it won't increase again until at least 2014. However, prior to this the threshold increased each year. You can check current and previous yearís Inheritance Tax thresholds on the HM Revenue & Customs website.



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