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JGM
JGM, Solicitor
Category: Law
Satisfied Customers: 12286
Experience:  30 years as a practising solicitor.
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My husband,brother and I have recently had my Father’s house

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My husband,brother and I have recently had my Father’s house renovated at our cost, so that he can be cared for by us to avoid going into a home. He is delighted with this arrangement and we take it in turns to care for him. The renovation cost a lot and we want to make sure that we can claim this back once Father dies without having to pay inheritance tax on it. Do we get Father to add to his will that he owes us this money? Or, do we get a document drawn up stating that his estate owes us? We have all receipts etc proving that we have invested in his property. Appreciate that we will have to pay inheritance tax on the extra money from the increased value of the house . Thanks

Thanks for your question. The best way to do this, and the most tax efficient, is for your father to treat this as a debt on his estate. This can be done in the will or in a separate document signed by him, such as an IOU detailing what he owes and why. That means that on the death of your father the amount spent on his house can be put in the estate inventory as a debt and acccordingly reduce the value of the estate for inheritance tax purposes. I hope that helps. Please leave a positive rating so that I am credited for my time.

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