Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
The UK has no gifts tax regime so these are outside the scope of UK taxation. Just thank your lucky stars you don't live in France where gifts tax kicks in at 5K Euros!
There is one matter for consideration. Gits create a Potentially Exempt Transfer (PET) in your Inheritance Tax (IHT) arrairs. PETs run off at a taper over seven years. The run off period does not start until you vacate. If you die within the time period the PET is added back to your estate and is the first to be exposed to IHT. If your estate is insufficient to meet the IHT on the PET the liability cascades down to the beneficiary for immediate payment.
IHT does not kick in until assets on death reach 325K. Between 2017 and 2020 the IHT limit will rise progressively to 500K for a family home left to children making a possible million between you and your wife. You will have to engage a Chartered Surveyor to split the values of the main residence and the granny annex. From this the value of the PET may be derived. The classic defence against IHT on a PET is a reducing term life insurance policy though the premiums might be prohibitive.
Your son and his wife will be liable for SDLT on the deemed consideration ie the current market value as at the date if initial transfer. If they already own a dwelling then they will be liable to the 3% surcharge which has been created to deter multiple ownership of houses. This surcharge can be refunded if the second dwelling is disposed of within three years.
I do hope that you have found my reply of assistance.
Got it will try to remember [joke]!
You have not accepted my offer of a telephone call, please do so then we can proceed.
Thank you for your support.
The phone call seems to have gone completely haywire. Please request it again.
I suspect it has expired.
Can you please offer your phone call request again. The original offer has expired.
There is a method for asking for a phone call. You did it before, but the offer expired. Please request it again.
It is for the Stamp Office in Birmingham to decide. In my opinion they will take the appropriate share of the market value and apply SDLT, including any surcharge, to the purchaser accordingly.