inheritance tax

[pminfo]

My mother is selling her house.To make the process as painless as possible for her, would it be possible for my sister and I to buy a house for her in our names, for her to live in and get her to pay rent on it. We would also need her to gift some of her savings when her house is sold to enable us to afford to repay the mortgage quickly. (Hopefully a Potentially Exempt Transfer). But would this be thought of as a "gift with reservation of benefit"?

[kempie]

Some relevant info from HMRC which may help you.

http://www.hmrc.gov.uk/leaflets/iht2.htm

http://www.hmrc.gov.uk/bulletins/tb9.htm#anchor551568

[Peter Pedant]

yes in old terms and no in new.

This counts I think as a pre-owned asset. previously it would have escaped the IHT net and has recently been brought into it - within the last 24 months

But if she gifts you the proceeds (as a PET) and lives for 7 years then you are OK.

This is a very difficult area and you have to pay a tax consultant to get up to date advice - actually not an expensive course, if you are worried about IHT then you are talking about sums greater than � 255 000