Hi
Possibly a commonly asked question, but would be interested in views...
A father has a house over the IHT threshold - say it's worth £2m. He is expected to live more than 7 years, has 2 sons, both higher rate taxpayers. He has limited other wealth. He wants to remain living in his house.
Is there anything the father and sons can do now to make the IHT position more efficient?
Thanks!
Inheritence Tax and Property
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DrFfybes
- Lemon Quarter
- Posts: 2664
- Joined: November 6th, 2016, 10:25 pm
Re: Inheritence Tax and Property
If he gives the house to them, then he must pay market rent, on which they will pay tax as income.
If he sells the house to them then he could rent it off them, again there'd be tax considerations, however he could then gift them a large chunk of cash and hope he survives 7 years.
How about Equity Release on the house and gift some of the cash to the sons? I've not looked into it, and personally I suspect there are a lot of downsides, but if there is a 40% tax hit to be avoided it might be worth investigating.
Paul
If he sells the house to them then he could rent it off them, again there'd be tax considerations, however he could then gift them a large chunk of cash and hope he survives 7 years.
How about Equity Release on the house and gift some of the cash to the sons? I've not looked into it, and personally I suspect there are a lot of downsides, but if there is a 40% tax hit to be avoided it might be worth investigating.
Paul