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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 26069
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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Advice please, due to the death of my ex husband ( Probate

Resolved Question:

Advice please, due to the death of my ex husband ( Probate has been Proved) I own half of the property and my son and daughter own a quarter each as per my late husbands Will. I am aware that if I gifted my half of the property (which I am being pressured to do by one of my children) I would have to live for 7 years and 1day and would incur 40% of the estate.
I have cancer and too date have been on chemo tablets for 8 years this month in my opinion I am not going to be taking these tablets for another 7years and 1 day.
I do not want to gift my half share in the property and have been asked by one of my children to go and see a Solicitor to find out if there is a way to reduce the 40% tax
Submitted: 3 years ago.
Category: Law
Expert:  Joshua replied 3 years ago.

Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

May I ask the value of the property please in total roughly?

Customer:

Value of property is approx. is two hundred thousand property not yet valued but house is same as 70 other properties in the Avenue

Customer:

Is anyone there please

Joshua :

Thanks. Is that the total market value for the property?

Joshua :

Do you own any other properties or any other significant assets - e.g.other properties?

Customer:

Yes we are looking at my share being approximately one hundred thousand sorry Joshua don't know how to write that figures in numbers; I am also living in a property valued at approx. three hundred and seventy thousand which is put in the frame by one of my children regarding tax on

Joshua :

Thank you. So you own 1/2 share in a property worth £200,000. Do you own the other £370,000 property in your sole name?

Customer:

My property my husband and I own- no mortgage is three hundred and seventy thousand do not own any other properties

Joshua :

Thanks. Just one or two more questions then we are there. You mention your husband gave half of the £200,000 property to your children in his will. Did he make any other significant gifts to anyone other than you (ignore any minor gifts)?

Customer:

The property I live in is jointly owned by my husband and I. On the death of one of us the other owns property which is willed to my two children my present husband has no children by previous marriage

Customer:

No

Joshua :

Thanks. Last questions: 1) would I be correct to understand that you were divorced from your ex husband at the time of his passing? 2) Is the size of your and your present husbands combined estates worth in excess of £650K - from what you say above I do not think this is the case but could you kindly confirm?

Customer:

No to 1 and

Joshua :

Thanks. Just to be sure I understand you correctly - you were still married to your ex husband when he passed away. Is that correct?

Customer:

Sorry Yes divorced and No not worth £650. just to let you know a Severence of the property was made in 2003 and is with the deeds of the house The property is still in my name and my ex husband as one of my children decided that I would gift the house which I don't want to do and the house not registered in their names

Customer:

Sorry about the delay in replying James but I have a new lap top and keep making mistakes which did not happen when using my computer

Customer:

No my ex husband and I were divorced in 1996

Joshua :

Thank you for bearing with my questions. I am sorry there were so many. On that basis I cannot see you have an inheritance tax problem. Each person has £325,000 allowance before the estate has to pay inheritance tax. If a spouse passes away, then the surviving spouse inherits any of their unused £325K.

Joshua :

This gives you and your current husband a total of £650,000 as an allowance before your estate will pay any tax. The only thing to ensure is that neither of your individual wills gives away more than £325,000 to anyone other than each other. e.g. you can leave any amount you want to each other without tax but if the first of you die left more than £325,000 to someone other than each other then any amount over £325,000 may be subject to 40% tax. I cannot see why you would do this however as you will presumably wish to ensure that the survivor of you is well provided for with the main inheritance for children coming after the second of you to pass away.

Customer:

So your saying that the hundred thousand would incur NO tax for my children if I gift it

Joshua :

You don't want to gift the property though do you?

Customer:

No I don't. want to, Joshua can I print this information off as I have not been able to write it all down how do I keep this information u

Joshua :

If you retain your share of the property based on the above information that your and your husbands combined estates are worth less than £650,000 there would be no inheritance tax to pay. If you were to gift your £100,000 share in the property to your children before your death, although you don't want to from what you say if it is not your main residence there may be capital gains tax to pay. Therefore it is likely to be more tax efficient to keep it based on what you say especially as you want to keep it anyway.

Joshua :

Yes of course. I can ask customer services to email you copy of the above if you would like?

Customer:

One child wants one thing the other doesn't, if I gift the one hundred thousand to my children will they have to pay tax?

Joshua :

Do you live in that property as your main home?

Customer:

No I live in No. 8 the three hundred and seventy thousand pound house. The ouse in dispute is 77 but

Customer:

James I pressed the wrong key again I could scream.

Joshua :

As the property is not your main home if you decide to gift your share of the property to your children now, there may be capital gains tax to pay if the value of the property has increased by more than £21800 since the time you bought it. CGT can be charged at 18% or 28% depending on whether you are a lower or higher rate tax payer and could be payable on any gain of more than £10900 on your half share between now and the date you acquired the property.

Joshua :

This is a completely different tax to inheritance tax and only arises as an issue if you gift the property during your life. If you leave it in your will it does not apply.

Joshua :

Is there anything above I can clarify for you?

Customer:

PLEASE ARRANGE FOR THIS INFORMATION TO BE SENT TO ME VIA EMAIL the more I type the screen moves up and I can't see what has moved up. typed in ca. ps by mistake

Joshua :

Certainly. I will ask customer services to email you a copy. Sorry if you are having any difficulties.

Joshua :

Is there anything else I can help you with?

Customer:

Thank you Joshua for your help I will rate you 100%

Customer:

Just to be sure there is no inheritance tax to be paid by my children if I gift their quarter share of one hundred thousand

Joshua :

A pleasure. Based on the above information there would be no inheritance tax to pay if you gift your £100,000 share either during your life or in your will after death. If you gift your £100,000 share during your life though as opposed to in your will after death, there may be some capital gains tax to pay.

Joshua :

If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. This will also save the thread and allow me to refer it to customer services to email you a copy.

Customer:

Would that be the 40% tax

Joshua :

IHT is charged at 40%. CGT is charged at either 18% or 28% depending on whether you are a lower or higher rate income tax payer.

Customer:

Does that apply to my children's tax payments I don't pay tax as I am 75

Joshua :

It would be based on your tax rate which would be the lower rate of 18% from what you say for CGT. You wouldn't have to pay though unless you chose to. It would be your children that would have to actually pay any tax unless you chose to pay it for them.

Joshua :

Is there anything else I can help you with?

Customer:

No thank you James you have been a great help. How would I contact you for any further information? What do I do to get a copy of this information Joshua?

Customer:

Sorry I called you James

Joshua :

I will I will ask customer services to email you a copy of the above information. You are welcome to contact me again if you need any further assistance using the following link or just by asking for me in the first line of any new question:

Joshua :

http://www.justanswer.com/law/expert-joshua/

Joshua :

I should be very grateful if you would kindly take a moment to rate my service to you today before you go.

Customer:

I will do that for you right away

Joshua :

many thanks

Joshua :

Best wisehs

Joshua :

Best wishes

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