your father transfers the property to you whether for £1 or £25,000, then if he
lives for seven years, the transfer/gift is free of inheritance tax on the
value of the transfer for which you did not pay valuable consideration at the
if the property is worth £250,000 and he let you have it for £25,000, £225,000
would be liable to inheritance tax along with all the other assets, subject of
course 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 for
however long he lives (or does not live).
could sell the property to you now for a nominal sum (however much) and
provided he lives for seven years, there is no liability to inheritance tax.
is a very large BUT.
is that if he continues to live in the property and pays anything other than the
full market rent to you (which must be visible and traceable and you must be
seen to spend it and he must be seen to pay it), then it is called a "gift with
reservation" which is not a gift talk but a sham gift. In order for it to
escape inheritance tax, he has to lose control and use of it.
transferring the property to you now not take it outside the inheritance tax
limit but it will avoid having to do the transfer when he eventually dies and
may avoid having to apply for probate depending on what the other assets he
assume that there are no other siblings who may decide to contest this.
is another potential issue if ever he does go into care and that is exactly the
same 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 to
set the transfer to you aside although any money with you paid for the house
would be preserved.
Can I assist
further or clarify anything for you?
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