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TaxRobin, Tax Consultant
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Experience:  International tax
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My mother is 71 years old and is concerned about Inheritance

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my mother is 71 years old and is concerned about Inheritance Tax. She has a house worth roughly £200,000 which she wants to leave to her 2 children. What is the most tax efficient way to do this?


If she leaves the home to anyone but a spouse (husband, wife or civil partner), it counts towards the value of her estate.

From 6 April 2017, she’ll get a bigger Inheritance Tax threshold if she leaves the home and it is her main home, to her children (including adopted, foster or stepchildren) or grandchildren.

If she gives the 2 children the home before she passes away then a time must be met.

There’s normally no Inheritance Tax to pay if she moves out and lives for another 7 years.

If she wants to continue living in her property after giving it away, she’ll need to:

  • pay rent to the new owner at the going rate (for similar local rental properties)
  • pay her share of the bills
  • live there for at least 7 years

If the estate’s worth less than £325,000 (that is the threshold) then she would not have to worry about inheritance tax.

She can leave them the home or give it now.

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Customer: replied 1 year ago.
The total estate will certainly be less than £325,000 so I'm safe to advise her not to worry about Inheritance tax?