How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask TonyTax Your Own Question

TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15707
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
13905389
Type Your Tax Question Here...
TonyTax is online now

When My Grandfather died in 1970, in his will he left the house

Customer Question

When My Grandfather died in 1970, in his will he left the house (he had built in 1967 for my Mom and Dad and my brother and I to live to live in) to My brother and myself equally and gave my Mom a life interest in it, so she could live there until she dies.
inheritance tax was paid in 1970 on the house.
my question is will my brother and I have to pay inheritance tax on this property - or as it was left to us will it be exempt
Also will there be capital gains to pay.
The house was valued at £5000 in 1970 ... it is currently valued around £450,000... so we are concerned that if it was included in my mothers estate when she dies, it would push the total value well over the current IH threshold allowance , (Approx £1million if the above house is included in her estate).
My Dad has recently died and as he left everything to Mom, his total allowance will be added to Moms..
Mom is 78 and will hopefully be here for some years to come ..:)
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.

Firs off, while Inheritance Tax went under another name in 1970, if your mother was given the right to live in the house through her father's will, then that is an interest in possession trust and the value of the house will form part of her estate when she dies.

Alternatively, she could renounce her interest during her lifetime in which case she will be treated as having made a potentially exempt transfer to the ultimate beneficiaries, you and your brother but that would require her to live for seven years for its value to fall out her estate. The IHT charge will taper away starting from the third anniversary of the gift as you will read here. Your cost for CGT purposes will be the probate value if you take possession of the house when your mother dies.

As you say, your mother's estate will benefit from the nil-rate band of your late father but that will still leave a significant IHT liability to be paid.

I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.

thank you

Expert:  TonyTax replied 1 year ago.

Thanks.

 

Please rate my answer before you leave the site. Thanks.

 

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    6894
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Last | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    6894
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    1772
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    464
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2596
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    268
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions