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Hi, thank you for your question. Just a bit more information required to fully assist you:
-Are you in England or Wales?
-Did your parents pass away - it is unclear from your question, as you have stated that you inherited the property, but then wish to give it back to them?
When was the property gifted to you and was there any exchange of money for the transfer?
Thanks - and who had use of the property after it was gifted?
Thanks for confirming.
The gift would likely be considered a "gift with reservation of benefit", which is basically them signing over the house to you but remain living in the property and benefiting from it. Tax rules say that the house will remain part of their estate due to this and one way around it is if they were to pay you market rent.
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My name is ***** ***** as I understand it what you really wish to know is the potential consequences of returning the property to your parents.
Assuming that there has been no substantial increase in the value of the property then there is no Capital Gains Tax liability so there will be no problem with the Taxman.
However do be aware that if you or your brother die in the next seven years there could be Inheritance Tax implications to your respective Estates.
So far as the Inheritance nil rate band is concerned that did not change when the house was transferred to you and will not change when it is transferred back.
They each have a Nil Rate allowance of £325,000 and in the event of one of them dying and leaving their entire estate to their spouse then their nil rate band will be added to that of the survivor
However it would be more sensible for them to own the property as Tenants in Common and each leave their share of the property to you and your brother - thus potentially avoiding losing it all in Care Home fees
Please ask if you need further details