Gifting property / IHT / Sale of primary residence
Discussion
I’m wondering if anyone has any ideas here as the solicitors I had spoken to seemed frankly useless.
In short, my mum has a property - just over 500k worth and with a single parent I believe it should be a 500K allowance for primary residence inheritance for a single parent.
If mum is to gift 100% of the property to us 3 siblings will it still be under the primary residence allowance (500k) and is it based on the current market value (how is that determined?) I would put the property at 475k and not above 550k due to the fact it is need of repair and refurb.
How do we confirm its value to HMRC ? Lastly if the properly is to be sold and the funds split 3 ways to us siblings would it be exempt under the 500k primary residence?
Mum only has a single uk property and I am aware that she can’t reside in it once gifted.
If anyone can direct me or clarify some of this it would really help some of the firms I’ve spoken to in this area are dreadful.
Thanks.
In short, my mum has a property - just over 500k worth and with a single parent I believe it should be a 500K allowance for primary residence inheritance for a single parent.
If mum is to gift 100% of the property to us 3 siblings will it still be under the primary residence allowance (500k) and is it based on the current market value (how is that determined?) I would put the property at 475k and not above 550k due to the fact it is need of repair and refurb.
How do we confirm its value to HMRC ? Lastly if the properly is to be sold and the funds split 3 ways to us siblings would it be exempt under the 500k primary residence?
Mum only has a single uk property and I am aware that she can’t reside in it once gifted.
If anyone can direct me or clarify some of this it would really help some of the firms I’ve spoken to in this area are dreadful.
Thanks.
It's slightly complicated.
Basically start by getting a RICS valuation for the value of the house before you start making calcs.
If it's worth less than 500k and she gifts it now, and dies in less than 7 years, 175k will be subject to IHT as it's not a primary residence any more. Although that tax amount does taper off during the 7 years.
However if she passes it on in the will, no IHT is payable.
Basically start by getting a RICS valuation for the value of the house before you start making calcs.
If it's worth less than 500k and she gifts it now, and dies in less than 7 years, 175k will be subject to IHT as it's not a primary residence any more. Although that tax amount does taper off during the 7 years.
However if she passes it on in the will, no IHT is payable.
Thankfully I didn’t, but when I tried to get quotes to move it along they had come up with:
2x solicitors needed for a zero cost sale and purchase at approx 2,300 (seller-mum / gift recipient)
Another claimed not to know about IHT / gifting / thresholds etc.
Seemed better off with Google and asking here to be honest.
Given only the primary residence is what keeps us under the IHT - will get the will updated with a codicil and that should be sorted
2x solicitors needed for a zero cost sale and purchase at approx 2,300 (seller-mum / gift recipient)
Another claimed not to know about IHT / gifting / thresholds etc.
Seemed better off with Google and asking here to be honest.
Given only the primary residence is what keeps us under the IHT - will get the will updated with a codicil and that should be sorted
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