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bigduckontax, Accountant
Category: Tax
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I bought my mother's family house in the 90's for less than

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I bought my mother's family house in the 90's for less than market value. To this end I believe this counts as a gift as far as inheritance tax is concerned. She continued to live in the property until her death last year. As part of filling in the IHT forms should this be declared as a gift or as a gift with reservation of benefit?

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

As she continued to occupy the house the difference in value was a gift with reservation and must be so declared on the IHT forms and be taken into account in valuing her estate for IHT purposes. IHT does not kick in until 325K in any event and any charitable bequests inflate that limit.

I do hope that you have found my reply of assistance.

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Customer: replied 10 months ago.
Hi Keith,
Thanks for your response. I assumed I needed to included it as a gift of reservation but the IHT form only seemed interested in the value of the house at death not on the value of the gift. At least I am clearer now on what I can enter in the IHT400 form.

Which, had you entered it, would have increased the estate's value for IHT purposes. A typical HMRC ploy to amass more revenue.

Thank you for your support.