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Let me take a look at this and I'll get back to you with an answer.
Here is my answer.
1 Yes. See section 2.5 here and the government confirmation following the consultation in paragraph 1.15 here.
2 If your mother in law gifts you the £50,000 so that it is not a loan, then the seven year clock will start ticking. After three complete years, the IHT exposure on the gift gradually decreases as you will see here. You will also read, that when somebody dies, their nil-rate band is first used against gifts made in the seven years before death in chronological order so there is a strong possibility that there will be no IHT charge on a gift of £50,000, especilaly if there are no other gifts. You could take out a term assurance policy with reducing cover to protect against an IHT liability on a £50,000 gift.
3 What's right for me would not necessarily be right for you. A gift would be simpler. However, I do wonder how you think having a loan as opposed to a gift will avoid IHT. A loan would probably be repayable on the death of your mother in law unless her death precipiates its write off. However, the loan would be an asset of her estate.
I hope this helps but let me know if you have any further questions.
Your analysis is correct.
It depends what the deed says as to how IHT is affected. Such a thing can complicate matters.
In that case, the loan will be an asset of her estate and potentially liable to IHT if it is still in place when she dies.
Look here for information on deeds of trust:
If your mother in law has an interest in the property through a deed of trust or not, the SDLT would not be affected. The fact that she has an interest is what is important.
A deed of trust can be written to say anything you want so unless you tell me what the deed of trust will say, I cannot say what effect it will have. If it just secures the loan and your mother in law has no part ownership entitlement, then there would be no extra SDLT to pay.
Hi.I'm just following up to find out if my answer helped or if you have any further questions.