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| *Ostroff, Fair and Company>>>United Kingdom Taxes |
Should I hand over 50% OF MY HOUSE DEEDS TO MY DAUGHTER? |
I am 83 and my daughter is worried about Inheritance Tax The inheritance tax threshold was raised in the budget on Wednesday (22/03/06). Current rules mean that 40% tax must be paid on any estate worth more than 拢275,000. This threshold will rise to 拢285,000 from April and then 拢300,000 by the 2007/2008 tax year. If your house is worth substantially less than this then it may not be worthwhile. Also you would have to live for 7 years in order for the house to be classifed as a "gift" by the Inland Revenue. If you pass away before that then the house will still be taxed as inheritance. One option is to move house and then use any spare cash to gift or distribute. If you do consider that signing over 50% of your hosue is the best way you should investigate carefully the laws on tenants in common, as this is treated slightly differently to joint ownership. For full information check out the Inland Revenue website here: http://www.hmrc.gov.uk/leaflets/iht.htm... It depends on the value of your house, also if you hand it over now, i am fairly sure that unless the laws have recently changed you will have to live for another 7 years for her to be entitled to it as a gift, and she will still have to pay inheritance tax also i am not sure how a joint ownership would work in regards to tax as you are not a married couple, sorry i cant be more help, where are you located? cos what i have told you is UK laws Regrettably it isn't as simple as just considering inheritance tax. You may be able to avoid IHT although as well as some of the other matters contained in previous answers it could fall foul as a gift with a reservation of title. Also and potentially more important you might need to consider whether at some point in the future you might need to move into a nursing or care home. If you have to and you do not have sufficient funds to pay the care home fees then you would look to the local authority to at least part fund you. They would look at the gift of part of your assets to your daughter and consider that you had deliberately reduced your assets, they would therefore assess your wealth as if you had not made that gift to your daughter and require you to contribute accordingly. In short you MIGHT solve the IHT problem but not a care home funding problem. I have direct experience of this with my mother.You would be well advised to take legal advice on the matter. |
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