Hello and welcome to the site. Thank you for your question.Please provide more information e.g.- the value of the property;- is the property in sole name;- is the estate likely to exceed £325,000 in value
- was it a gift to sibling by parents in the first place with a right to live in it after transferMany thanks
In simple terms, if you are single and die during the tax year 2014-2015 with an estate worth more than £325,000 (including money, property and investments, but after deducting debts and expenses such as funeral costs), 40% tax will become due on anything above £325,000.
You have not stated if you sibling is single or married. For example, if you leave behind an estate worth £500,000 the tax bill will be £70,000 (40% on £175,000 – the difference between £500,000 and £325,000).
However, if you are married or in a civil partnership, you may be able to leave more than this before paying tax.
You should also consider IHT implications of any gifts that have been made during your lifetime.
As well as on your estate at death, inheritance tax may also be payable on gifts you make during your lifetime, especially if you die within seven years of making the gift. They fall in categories as follows:
- Gifts that are always tax free irrespective of when you make them
- Potentially exempt transfers and seven years ule applies to these - if you survive for 7 years after making the gift, then the gift does not form part of the estate for IHT purposes and there is no tax payable related to it.
- Regular gifts out of giver’s income (as opposed to capital/savings)
- Payments to help with living costs
This is not an exhaustive list and more details can be founds here
General information on inheritance tax and IHT planning can also be found here
You are recommended to seek expert input if you thisnk your siblings financial affairs are complex to safeguard assets and minimise IHT payable.
I hope this is helpful and answers your question.
If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
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