Ifyour father transfers the property to you whether for £1 or £25,000, then if helives for seven years, the transfer/gift is free of inheritance tax on thevalue of the transfer for which you did not pay valuable consideration at themarket price.
Hence,if the property is worth £250,000 and he let you have it for £25,000, £225,000would be liable to inheritance tax along with all the other assets, subject ofcourse to nil rate band of £325,000 (currently)
If he transferred the property to you for£250,000. There is never any inheritance tax however much money he leaves forhowever long he lives (or does not live).
So,could sell the property to you now for a nominal sum (however much) andprovided he lives for seven years, there is no liability to inheritance tax.
Thereis a very large BUT.
Thatis that if he continues to live in the property and pays anything other than thefull market rent to you (which must be visible and traceable and you must beseen to spend it and he must be seen to pay it), then it is called a "gift withreservation" which is not a gift talk but a sham gift. In order for it toescape inheritance tax, he has to lose control and use of it.
So,transferring the property to you now not take it outside the inheritance taxlimit but it will avoid having to do the transfer when he eventually dies andmay avoid having to apply for probate depending on what the other assets heleads.
Iassume that there are no other siblings who may decide to contest this.
Thereis another potential issue if ever he does go into care and that is exactly thesame as the consideration for inheritance tax. If the money is needed for care,and you have not paid the full price, the local authority can apply to court toset the transfer to you aside although any money with you paid for the housewould be preserved.
Can I assistfurther or clarify anything for you?
Can Ihelp further?
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