How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Clare Your Own Question
Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 34236
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
13262538
Type Your Law Question Here...
Clare is online now

My partner has always said that she would give me half , of

Customer Question

My partner has always said that she would give me half , of what is officially , her house in the event of us splitting up. We have now parted amicably , we are very good friends , and she wishes to fulfill her promise. How can we go about this without causing any tax problems. We are both main beneficiaries in each other's wills but we wish to make sure that we will not cause any inheritance tax problems as the house is worth about £500,000. Can she just give me half the house or would it have to be sold? Could she then give me half of the money? We're not sure we will last 7 years.
Submitted: 2 years ago.
Category: Law
Expert:  Clare replied 2 years ago.
Hi
Thank you for your question.
My name is ***** *****
I will do my best to help you but I need some further information first.
What other assets are there?
Clare
Customer: replied 2 years ago.

On her side there are no other assets. On my side there will soon be a reasonable amount of cash approximately £180,000

Expert:  Clare replied 2 years ago.
Hi
May I ask how old you both are?
Clare
Customer: replied 2 years ago.

We are both 50 but she has not been well at all for a number of years. I realise this is young but we do not want to take the risk of anyone , especially the inland revenue , getting any of our money if one of us , probably her does not live for 7 years. (The 7 year rule) She is especially adamant about this.

Expert:  Clare replied 2 years ago.
Hi
Does she wish to remain living in the property - and could she raise any equity?
Clare
Customer: replied 2 years ago.

She is ambivalent as regards ***** ***** the property - I don't think it would be possible for her to raise the equity to give me cash , she doesn't mind selling but I don't see any problems on my side with her staying on in the house for the foreseeable future as long as the house was officially half mine and we could relax knowing things will go the way we always wanted without worrying about the inland revenue (If the house was half mine now i don't think we would have to worry about inheritance tax later on) We do still love each other (even though we are separated) and are aware that if we had sorted this out years ago , properly , we would not have a problem now

Expert:  Clare replied 2 years ago.
Hi
The obvious way forward is to arrange for the house to be transferred into your joint names.
Since there is no mortgage this is easily dealt with.
If your partner does die within the next seven years then there will be a potential liability for Inheritance Tax - but there is no way around this.
However the sooner the transfer happens the sooner the time limit starts to run and each year the value is discounted.
I hope that this is of assistance - please ask if you need further details
Clare
Customer: replied 2 years ago.

There is a small mortgage. Definitely less than £40,000 . How would this affect the situation?

There may be in the future the possibility of just paying this off

Expert:  Clare replied 2 years ago.
Hi
The Mortgage Company would need to agree to the Transfer.
The other option is for your partner to sign a Declaration of tRust confirming that she holds the property on behalf of you both
Clare