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Ask Clare Your Own Question

Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 33293
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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Did I have to pay the full inheritance tax on my mothers

Customer Question

Did I have to pay the full inheritance tax on my mothers house, as she was letting some of it out? Business tax relief?

Submitted: 1 year ago.
Category: Law
Expert:  Clare replied 1 year 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.
Could you explain a little more about the background to your question please?
Clare
Customer: replied 1 year ago.

My Mother, who was a British citizen, passed away in 2007, leaving her assets solely to me, her son. The vast majority of her assets I value was a Victorian house , located in London.

I , the son, am also a UK citizen, paid substantial inheritance tax, mainly on the value of the house.

My mother lived on the ground floor of the house, but the two top floors were let to tenants, and her annual income tax returns included the income from these tenants.

My question is: Should I have applied for some inheritance business tax relief on the inheritance tax which I paid?

Expert:  Clare replied 1 year ago.
Hi
Were the upper floors separate flats?
Clare
Customer: replied 1 year ago.

yes , 2 flats on each floor,4 flats in total. each flat had own kitchen, own shower, but shared toilet on each floor.

I am now looking after the flats and renting them.

Expert:  Clare replied 1 year ago.
Hi
Just to check - the properties could not be sold separately then?
Clare
Customer: replied 1 year ago.

I am not sure on this point. At one time, one of the tenants offered to buy one of them. I think it might be possible , but an agreement would have to be made to share the cost of maintaining the house.

Customer: replied 1 year ago.

I think it might be possible. Usually in the property market anything is possible.

Expert:  Clare replied 1 year ago.
Hi
I am sorry - i meant that these were not entirely separate properties that your mother owned and leased out.
If they had been then you might have been eligible to claim some relief on that basis, since in fact the property remained one property that could be leased out in this way it does not qualify as a business asset as such.
Please ask if you need further details
Clare

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