i am still waiting for answer which i cannot view on screen at the moment. Is it a system fault??? Why is it taking so long for this to be resolved???
Province/Country relating to question : uk
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I have replied to your previous questions. I have switched out of the chat function in case this is causing a problem for you.
Can you see this now?
I can see your answer now Joshua. I will check your response to queries previously requested.
Good. Sorry you had difficulties previously.
Does your mother live in the property please?
Joshua, can you re-send your reponse on this line as i have just checked the original question line and the answer still did not appear. Many thanks.
yes , this is correct.
Sorry for the delay in reverting to you. I am away this weekend and have very little access to the internet. I am back tomorrow evening but will try and check in if and when I can. Thanks for the above. Unfortunately your original question has been locked as a duplicate question and I cannot view it. Could you kindly repeat your question as I cannot recall what it was?
Thank you very much for the previous responses they have been extremely helpfull, but i have a few more things im not clear about. The morgage deeds are in my Mothers & Brothers name as confirmed previously , so i would assume that on the death of my mother IHT would be payable on her 50 % ownership of the property. There does not appear to be any profit in changing my name to the deeds excluding my mother name even after 7 years ? Can you confirm this.
What is the current rate of IHT and what period does the government require for this to be paid?
Is IHT based on the market value of the property at the day of mothers death.?
Who decides the market value of the property and can that be disputed?
You mentioned that if my mother was still living in the property up to her death the IHT will be applied, so if my mother were ever to need a care home in the future would this be deemed as not living in the property?. If so, how long would this need to be to be excluded from IHT payments.?
I understand that if any carehome fees were in excess of her pension the state will not contribute but will need to be paid with her 50% of the property. Does this mean that the property will need to be sold to finance this or would it be a condition of sale any monies due when she does pass away?
thank you. If your mother is living in the property still then there are likely to be nothing other than negatives in your transferring property out of your mother's name is XXXXX XXXXX benefit you for inheritance tax purposes because it will be deemed to be a gift with reservation and therefore treated by the revenue as if the property is still within her estate. At the same time, it will add to your estate simultaneously and give you a capital gains tax issue whereby would be liable for capital gains tax to be assessed upon any sale of the property. Inheritance tax is currently charged at 40% over £325,000 note if your father has passed away and left everything to your mother, whom I could benefit from your fathers and used your rate band giving her up to double the nil rate than threshold to £650,000the executors should have the property valued by estate agents and it is up to the executors to launch an inheritance tax valuation as part of the tax return they must submit the revenue when obtaining probate. It is possible for the revenue to dispute the valuation by reference to the district valuer if they feel it is either over or under valued the revenue tend to become involved if there is inheritance tax or capital gains tax in the balance.
Thanks for the speedy response , however im not familiar with legal terminology at the moment so please bear with me if i ask explanation of a simple issue.
The property is below the 325K level at the moment so no IHT will be attributed after leaving this part of the estate to me in her will. At the moment my brother is responsible to the lender for the repayments of the morgage and my mother then deposits monies into his account each month. I contribute regular payments to my mothers account in equal share as my Brother . So as far as the Inland revenue are concerned my Brother pays all the monies for the property.
Does this have any relavence in IHT and the 'Gift with reservation' ? & what is the 'resevation' bit of this terminology.
If the property exceeds 325K in 12 years time ( Which is most likely) , would me & my brother potentially be liable to pay both inheratence Tax on Mothers death and capital gains Tax on sale of property?
In order to pay 40% IHT what period of time is given for this to be paid. If we cannot pay this does this mean the property will need to be sold.?
If your mothers estate is under £325K then there are no IHT implications you need concern yourself with at present. In terms of the future value, has your father passed away previously please and if so did he leave everything to your mother?
Parents divorced some time ago, nothing came to any of us , it all went to his later family unfortunately.
thank you.a different reservation is a gift that is made on the one hand whilst on the other retaining a benefit in it. In the case of a house, if the person giving the gift continues to retain some form of benefit, typically this would be continuing to live in the property, the gift is ignored by the revenue for the purposes of calculating inheritance tax.If your mother on the other hand could show that she has been paying rent to live in the property after making the gift, this would satisfy the Gifford reservation requirements and the property would be treated as having been gifted if it was both given away and subsequently rent was paid she continued to live there.if your mother's share of the property together with the rest of her estate exceeds nil rate band which is presently £325,000 though historically has been increased each year although the level has not been increased the last two or three years then the inheritance tax is assessed at 40% above anything that exceeds £325,000.you do not have to pay capital gains tax as well as inheritance tax. On death, the base level on which capital gains tax is calculated is reset to the valuation given at the date of death and capital gains tax is then assessed on the difference between the amount a property is sold for the amount the property was valued at the probate purposes upon death.the revenue allow a period of six months from the end of the month in which the person died to pay tax due on an estate. However they will not allow probate to be granted until tax has been paid and so executors sometimes must obtain a loan in order to assist them with any tax payable if this cannot be afforded before property is to be sold.I should be very grateful if you kindly remember to click ACCEPTkind regards
LL.B (Hons), Prof Dip Law & Practice. 9 years experience in private practice in England
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