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Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 33538
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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There, My brother and I inherited our parents house (value

Resolved Question:

Hi there,
My brother and I inherited our parents house (value £500k) in November last year and the deeds of the house were changed. After various conversations between all of the family, we agreed to give the house back to our parents.
Can we do this? And if so, would the inheritance tax threshold of our parents go back to the full amount, I believe to be £650k?
Many thanks
Submitted: 8 months ago.
Category: Law
Expert:  Harris replied 8 months ago.

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?

Customer: replied 8 months ago.
Many thanks for your prompt responseWe are in England. Our parents didn't pass away. They decided to pass the house on to us because they were worried the house value will increase above the threshold so they rushed.Now they're even thinking of moving but they probably still will leave an asset so they need to find out if they're inheritance threshold will go back to full.Furthermore, will I be ok in giving the house back. I.e, would I end up with a bill from HMRC. I'm guessing not because I haven't benefited
Expert:  Harris replied 8 months ago.

When was the property gifted to you and was there any exchange of money for the transfer?

Customer: replied 8 months ago.
November 2015 and no exchange of money
Expert:  Harris replied 8 months ago.

Thanks - and who had use of the property after it was gifted?

Customer: replied 8 months ago.
My parents are living in the property before and after the transfer of deed.I moved out about 3 years ago and my brother moved out early 2015
Expert:  Harris replied 8 months ago.

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.

I hope this assists you. If you found this information helpful please provide a positive rating using the stars at the top of this page. I will not be credited for answering your question without a positive rating. Thank you

Expert:  Harris replied 8 months ago.

Hi, this question remains open. If you found my information provided helpful please could you rate my response positively using the stars at the top of this page as I will not be credited for my response without a positive rating.

Expert:  Clare replied 8 months ago.

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

Clare, Solicitor
Category: Law
Satisfied Customers: 33538
Experience: I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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