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Thomas Judge
Thomas Judge, Lawyer
Category: Property Law
Satisfied Customers: 33037
Experience:  Over 20 years experience
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Can we leave/transfer our flat before our death?

Resolved Question:

Can we leave/transfer our flat before our death?
Submitted: 2 years ago.
Category: Property Law
Expert:  Thomas Judge replied 2 years ago.
Yes you can but there will be tax considerations. How much Inheritance Tax is charged on a home depends on how the person who died owned it and how they passed it on.Passing on a home as a giftIf a person passed on their home to their children (or someone else) before they died, it’s treated as a gift and the 7 year rule applies.But if they continued to live in it rent-free, their estate has to pay Inheritance Tax on the home even if they lived for 7 years after giving it away. This is known as a ‘gift with reservation of benefit’.Giving away the home and moving outThe original owner can make social visits and stay for short periods in a home they’ve given away without affecting the 7 year rule.7-year ruleThe original owner must live for 7 years after giving the gift. Any gifts made less than 7 years before death count towards the Inheritance Tax threshold (£325,000). They count towards the threshold before the rest of the estate.If the donor gave away more than £325,000 of gifts in their final 7 years, tax is due on everything over that threshold.Gifts made 3 to 7 years before the deathThe rate of tax is reduced for gifts made between 3 and 7 years before the person died. This is known as ‘taper relief’.Years between gift and deathPercentage of the tax you payEffective tax rate (if not qualified for reduce rate)less than 3100%40%3 to 480%32%4 to 560%24%5 to 640%16%6 to 720%8% I hope that this helps - you should go to a local solicitor who would be able to arrange it for you should this be your decision.Please rate positively - thanks
Expert:  Thomas Judge replied 2 years ago.
I hope that this helps - happy to discussPlease remember to rate positively - thanks
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