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Buachaill
Buachaill, Barrister
Category: Law
Satisfied Customers: 10527
Experience:  Barrister 17 years experience
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If I sell my house to my daughter than the market

Customer Question

If I sell my house to my daughter for less than the market value and live with them in the soon to be converted garage into a granny annexe would she be liable for inheritance tax if I died and how much would it be?
Submitted: 1 year ago.
Category: Law
Expert:  Buachaill replied 1 year ago.
1. In the UK, there is no such thing as Gift Tax. However, gifts made by you to your daughter are liable to Inheritance Tax at a declining rate for up to seven years after your make the gift. However, if you survive for 7 years, then there is no Inheritance tax payable by her on the gift made by you to her. Accordingly, if you sell your house for less than the market value to her, the "gift" element has no tax to be paid on it, if you survive for seven years after the date of transfer. For this reason if you intend to make any element of gift to your daughter, there is no Inheritance tax payable if you survive seven years. If you die during the seven yeaers, then there is a declining rate of Inheritance tax payable on the gift element.
Expert:  Buachaill replied 1 year ago.
2. PLease Rate the Answer as unless you Rate the Answer your Expert receives no payment for answering your question.
Customer: replied 1 year ago.
So there is no problem with me selling my house to my daughter below the market value? Can you tell me approx what the inheritance tax would be if I died within 7 years?
Expert:  Buachaill replied 1 year ago.
3. There is no problem with you selling your house to your daughter for below its market value. secondly, your estate needs to be worth more than £325,000 for any Inheritance tax to fall due. Amounts above this are taxed at 40%. x p, over the seven year gift period the tax rate tapers off to zero after seven years. Accordingly, the rate of Inheritance tax payable depends on the number of years of the seven that you live, as it declines equally over the seven years.
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Customer: replied 1 year ago.
Thank you so much for your advice. I'm glad I found this web site it was so quick and easy. I shall keep it for the future.
Expert:  Buachaill replied 1 year ago.
4.You are welcome. Glad I could be of assistance!

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