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Inheritance Tax
if a daughter has lived in a house technically owned by the father for around 18 years, and the dad decides to transfer the property, legally, to the daughter - would it be subject to inheritance tax if he dies within 7 years?
does the fact that it has been the home of the daughter for almost 2 decades show somewhat that the home had in fact been 'given' to the daughter many years earlier - just not on paper.
Could this prove that he is not disposing of assets simply to avoid paying IT?
the father does not live in the house.
My dad is worried now that although he gave me the house many years ago, he thinks by not transferring it into my name i am going to lumbered with a massive IT bill - he is 86 so its possible he will not live another 7 years.
the mad thing is i am sure he has been worrying about this for more than 7 years by now!
are these cases judged purely on paperwork rather than circumstances?
Thanks
does the fact that it has been the home of the daughter for almost 2 decades show somewhat that the home had in fact been 'given' to the daughter many years earlier - just not on paper.
Could this prove that he is not disposing of assets simply to avoid paying IT?
the father does not live in the house.
My dad is worried now that although he gave me the house many years ago, he thinks by not transferring it into my name i am going to lumbered with a massive IT bill - he is 86 so its possible he will not live another 7 years.
the mad thing is i am sure he has been worrying about this for more than 7 years by now!
are these cases judged purely on paperwork rather than circumstances?
Thanks
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O God Joko
IHT is on your father's estate at death -and the estate pays it before the kids get their hands on the moolah
and yes it is as you say.
and no (or yes) even if there were 20 heirs and they were getting each an eeny weeny amount, the calculation for the estate before pay out is the same.....
IHT is on your father's estate at death -and the estate pays it before the kids get their hands on the moolah
and yes it is as you say.
and no (or yes) even if there were 20 heirs and they were getting each an eeny weeny amount, the calculation for the estate before pay out is the same.....
Anything in joint names would go to your mother automatically. Then the total of anything in his name only after the £325000 limnt (or the amount determined when he died) was deducted would have the 40% tax deducted. If he left your mother everything, keeping what was left to £325000 or less there would be no tax to pay on it, but when your mother died her tax free limit would not be able to be increased, as your dad will have used all his allowance..
if you have had a tenancy and paid rent for 18 years, then surely you can see, you have absolutely zero chance of proving to anyone that the house is actually yours? If he gave you the house many years ago, how can you have a tenancy?
How can you have a tenancy agreement if you don't pay rent? How come you only pay rent when you get HB? It's all a bit beyond me that you don't think this is dodgy in any way!
How can you have a tenancy agreement if you don't pay rent? How come you only pay rent when you get HB? It's all a bit beyond me that you don't think this is dodgy in any way!
i think it's worthwhile finding out how he owns the house(s). Does your mum also own them? Does he own them on his own? Does she own a percentage? Then when you've done this, you can work out what the IHT liabilities might be. If the estate is large altogether, it might be worth taking professional advice, rather than trying to muddle through on your own. Of course, there is always the possibility your mum might die forst, and if she owns or part owns any of them, it would put a different light on things
Sorry bednobs. I'd read all that as being in the past but i see there is a reference to a shop.
I think there is a danger of tying oneself in knots trying to juggle things like this.
Paid for professional advice may be best.
Or just stop worrying about IHT tax- it's the estate that pays it. We can't take it with us
I think there is a danger of tying oneself in knots trying to juggle things like this.
Paid for professional advice may be best.
Or just stop worrying about IHT tax- it's the estate that pays it. We can't take it with us
The rules under which the estate will be taxed on the fathers death are straightforward
all joko has to do is read them and apply them (even if she doesnt want to read the two posts where they are applied for her )
In terms of minimising the IHT of someone aged 85 - I think it is all a Bit Late, but may be worth paying to find out
as the bill for delaying ( which I dont think was a mistake I think it was the father's intention ) may be high (or may not, depending on whether todays figures are eentsy weentsy or big big big )
reminds me v much of my own dear family - I can say my own dear grasping family cant I ?
all joko has to do is read them and apply them (even if she doesnt want to read the two posts where they are applied for her )
In terms of minimising the IHT of someone aged 85 - I think it is all a Bit Late, but may be worth paying to find out
as the bill for delaying ( which I dont think was a mistake I think it was the father's intention ) may be high (or may not, depending on whether todays figures are eentsy weentsy or big big big )
reminds me v much of my own dear family - I can say my own dear grasping family cant I ?
factor - yes i don't really understand it all really, i think we are best seeing someone.
not trying to scam it at all - i have not suggested doing anything illegal, i am just trying to see what the situation is, and if i could qualify for any sort of special circumstances or something given that this is my home, not a deathbed gift.
everyone's circumstances are different so i am asking here for the rules.
no bedobs, i have done nothing illegal at all.
i have explained the situation - not sure how many more ways there are to explain it
i moved in - got a tenancy agreement and rent book and paid rent.
then i signed on and got housing
then i signed on and off again over the next few years, but my dad kept refusing to take the rent or would give it me back or even just pay my bills etc -
then i became self employed and stopped claiming completely - but depending on what i am earning i give my mum money sometimes - he still tries to hand me notes every time he sees me, even when i am earning.
thats just how he is.
he hates the idea of taking a single penny off me and argues with my mum about it ...
he even moans when i buy him a bottle of whiskey for his birthday, says i've spent too much on him!
it is completely up to him whether he takes my own personal cash off me or not, and he was also perfectly legal and entitled to get rent for his property - same as he would be getting if he rented to a stranger,
and the same as i would be getting if i lived in a different house.
not sure how you think this is illegal.
as i say even if i physically handed him the cash he would just hand it back somehow, so we just stopped
he has 'given' the house to me - but not signed it over to me legally yet - its just kind of 'known' that the house is mine, and will be legally mine one day.
this is why have asked the question because its confusing and needs to be sorted out properly.
not trying to scam it at all - i have not suggested doing anything illegal, i am just trying to see what the situation is, and if i could qualify for any sort of special circumstances or something given that this is my home, not a deathbed gift.
everyone's circumstances are different so i am asking here for the rules.
no bedobs, i have done nothing illegal at all.
i have explained the situation - not sure how many more ways there are to explain it
i moved in - got a tenancy agreement and rent book and paid rent.
then i signed on and got housing
then i signed on and off again over the next few years, but my dad kept refusing to take the rent or would give it me back or even just pay my bills etc -
then i became self employed and stopped claiming completely - but depending on what i am earning i give my mum money sometimes - he still tries to hand me notes every time he sees me, even when i am earning.
thats just how he is.
he hates the idea of taking a single penny off me and argues with my mum about it ...
he even moans when i buy him a bottle of whiskey for his birthday, says i've spent too much on him!
it is completely up to him whether he takes my own personal cash off me or not, and he was also perfectly legal and entitled to get rent for his property - same as he would be getting if he rented to a stranger,
and the same as i would be getting if i lived in a different house.
not sure how you think this is illegal.
as i say even if i physically handed him the cash he would just hand it back somehow, so we just stopped
he has 'given' the house to me - but not signed it over to me legally yet - its just kind of 'known' that the house is mine, and will be legally mine one day.
this is why have asked the question because its confusing and needs to be sorted out properly.
pp - my dad knew nothing about IHT until a few years ago.
my mum always dealt with everything, so not sure what you mean that he has intentionally delayed... how would that help him?
my dad has barely ever set foot in a bank never mind dealt with all this kind of stuff.
as for grasping - he is just trying to see the best way to minimise massive payments - that's all - no-one has suggested doing anything illegal - i just wanted to know the process.
so your family may be grasping, but i don't think a man who was prepared to forego 18 years worth of proper rent in order to house his daughter could be considered a grasping man.
a grasping man would have got 2-3 tenants in the claimed the full going rate, and told his daughter to go somewhere else ...
thank for all the helpful answers
my mum always dealt with everything, so not sure what you mean that he has intentionally delayed... how would that help him?
my dad has barely ever set foot in a bank never mind dealt with all this kind of stuff.
as for grasping - he is just trying to see the best way to minimise massive payments - that's all - no-one has suggested doing anything illegal - i just wanted to know the process.
so your family may be grasping, but i don't think a man who was prepared to forego 18 years worth of proper rent in order to house his daughter could be considered a grasping man.
a grasping man would have got 2-3 tenants in the claimed the full going rate, and told his daughter to go somewhere else ...
thank for all the helpful answers
Been reading all this with a sense of disbelief.
Two things are quite clear,
1 The house is at present legally your Fathers.
2 If the entire estate is over the tax threshold then IT will apply on your Dad's death.
Nothing else is relevant.
This should have been sorted years ago, it is probably too late now.
Two things are quite clear,
1 The house is at present legally your Fathers.
2 If the entire estate is over the tax threshold then IT will apply on your Dad's death.
Nothing else is relevant.
This should have been sorted years ago, it is probably too late now.
It's not too late, if joko gets legal advice and her dad writes a will detailing exactly what he wants to happen with the various parts of his estate. That should be the first priority now, whilst he still has all his marbles - if at any point his memory starts to fail, it'll be too late then. Seek legal advice, joko.
Eddie please please you are being a little censorious.
for me it is deja vu all over again.- esp the repeated questions in the hope the answer may be different (and better). And joko has never said: 'I just DONT believe IHT is payable in this situation, I think you are all Having Me On !'
It is never too late for a will. [do it now]
and the tax man will never say O it is too late to pay IHT so you dont have to pay anything.
too late for effective IHT planning - I think they will have to pay and see.
for me it is deja vu all over again.- esp the repeated questions in the hope the answer may be different (and better). And joko has never said: 'I just DONT believe IHT is payable in this situation, I think you are all Having Me On !'
It is never too late for a will. [do it now]
and the tax man will never say O it is too late to pay IHT so you dont have to pay anything.
too late for effective IHT planning - I think they will have to pay and see.
joko - grasping applies only to my immediate family
and believe me they are
if you read the posts - your father could not possibly be [called] grasping - which is only used of hopeful would be heirs and not testators
apologies if this were misread -
I intended only to use grasping of my family
who are of course well aware of my sentiments.
and believe me they are
if you read the posts - your father could not possibly be [called] grasping - which is only used of hopeful would be heirs and not testators
apologies if this were misread -
I intended only to use grasping of my family
who are of course well aware of my sentiments.
Joke, I can totally see what you are doing by trying to maximise every advantage. I am just saying you can't have it both ways. Either the house is yours and therefore you can't claim h b or its his and you can claim hb but will be subject to inheritance tax. You can't have it as his house when it suits you but then your house when it suits you. What I don't understand is how you can call it a tenancy and have a rent book when you don't pay rent and consider the house yours
-- answer removed --
bednobs - i have not at any point said the house is legally mine -
legally it is most definitely my dads - as i have stated a few times.
My question was,
does the fact that -
# it is not his own home,
# i have been resident in the house for 18 years,
# that it is mine in all but the deeds
# that i have long been named as being left the house upon his death,
- go any way towards proving to the IT that me ultimately owning the house legally in the future is not simply a deathbed gift, or a deliberate attempt to avoid IT if he signs it over while he's still here ... and therefore has some affect on the 7 year rule.
He feels its mine, that he gave it to me years ago, in fact that's why he bought the properties when we were little - because he wanted to be able to give us places to live.
so surely you can see that if he now puts the deeds in my name, it would not simply be a trick to get out of IT - because its just a formality - nothing would change for either of us, it has always been the intention.
He has had very little benefit from the house for 18 years - except a few years worth of rent at the beginning.
so i say again i am not trying to have it both ways - i am asking a question to see if there are any variants on the outcome.
you can call it whatever you want but if there is a way I can stop being faced with a huge bill then i would be a fool not to explore it - there is nothing illegal about looking into options.
i know nothing about this kind of thing so i'm trying to learn about it by asking here - so i know what the rules are, what we must do etc.
methyl - as i have said - i did have rent book and tenancy agreement.
it is all above board.
my dad is a landlord of a few properties - its his business - and he rented this house to me - instead of renting it out to other people and making money - he decided to take a loss by letting me have it.
i paid rent properly at first, but after a while he decided he didn't like to physically take my money off me - at the time he was still working and did not need it.
he is my dad and he is entitled to do that.
i could physically give him the £55 every week, but he would just give me it back somehow ... so why go through all that rigmarole?
then they retired and don't have as much money any more and although he still wouldn't take it off me, when was entitled to housing i took it so help them out as they had helped me out all my life.
i do still give my mum money when i am working but it is not a regular weekly amount.
legally it is most definitely my dads - as i have stated a few times.
My question was,
does the fact that -
# it is not his own home,
# i have been resident in the house for 18 years,
# that it is mine in all but the deeds
# that i have long been named as being left the house upon his death,
- go any way towards proving to the IT that me ultimately owning the house legally in the future is not simply a deathbed gift, or a deliberate attempt to avoid IT if he signs it over while he's still here ... and therefore has some affect on the 7 year rule.
He feels its mine, that he gave it to me years ago, in fact that's why he bought the properties when we were little - because he wanted to be able to give us places to live.
so surely you can see that if he now puts the deeds in my name, it would not simply be a trick to get out of IT - because its just a formality - nothing would change for either of us, it has always been the intention.
He has had very little benefit from the house for 18 years - except a few years worth of rent at the beginning.
so i say again i am not trying to have it both ways - i am asking a question to see if there are any variants on the outcome.
you can call it whatever you want but if there is a way I can stop being faced with a huge bill then i would be a fool not to explore it - there is nothing illegal about looking into options.
i know nothing about this kind of thing so i'm trying to learn about it by asking here - so i know what the rules are, what we must do etc.
methyl - as i have said - i did have rent book and tenancy agreement.
it is all above board.
my dad is a landlord of a few properties - its his business - and he rented this house to me - instead of renting it out to other people and making money - he decided to take a loss by letting me have it.
i paid rent properly at first, but after a while he decided he didn't like to physically take my money off me - at the time he was still working and did not need it.
he is my dad and he is entitled to do that.
i could physically give him the £55 every week, but he would just give me it back somehow ... so why go through all that rigmarole?
then they retired and don't have as much money any more and although he still wouldn't take it off me, when was entitled to housing i took it so help them out as they had helped me out all my life.
i do still give my mum money when i am working but it is not a regular weekly amount.
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