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bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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I have inherited a property valued for probate at 750k I

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I have inherited a property valued for probate at 750k
I wish to give half ownership to my brother by varying the terms of the inheritance within the 2 year limit.
1. Does that affect my liability for IHT
2. Does my brother have to pay HMRC anything.
3. If I pay the IHT in full does that reduce the value of the half I transfer.
4. In 9 months since the transfer to me I have spent a lot on refurbisment. Will this affect the 1/2 transfer value or is it still half the probate valuation.
5. Do I have to live more than 7 years for the transfer to be gift tax free.
6 If we jointly sell the property in a few years and have to pay CGT , half each, will that affect the gifting tax (if any) on my gift of half.

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

1. It is a commonly held misconception that beneficiaries are liable for IHT. This is usually not the case, IHT is a matter for executors or administrators before the estate is distributed in accordance with the terms of the will.

2. No.

3. You do not pay IHT as I explained.

4. On whose authority have you refurbished the building?

5. Transfers of this kind create a Potentially Exempt Transfer (PET) in the donors IHT affairs. PETs run off at a taper over 7 years and in the event of a decease withing this period are added back to the donor's estate for inclusion in the IHT computation. PETs are the first to suffer IHT and if the estate is insufficient to meet the tax on the PET then the liability cascades down to the beneficiary for immediate settlement.

6. Not at all.

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

Customer: replied 8 months ago.
Re 5 Is the value of the gift out of the will half that of the probate valuation?

Probably, but HMRC may insist on the current market value being substituted.

Customer: replied 8 months ago.
Sorry forgot to answer you
.Refurb authorisation by me - the inheritor
Customer: replied 8 months ago.
not me me son - typo

Just making sure, you can drop a horrible clanger refurbishing without authority.

Customer: replied 8 months ago.
No Thanks didnt do that.
I am being harrassed by "young" visitors here ! Your advice has been very clear and will help me a great deal - I will give you a good recommendation - thx

Delighted to have been of assistance.

I have no such problems, both my grand children live in New Zealand!

bigduckontax and other Tax Specialists are ready to help you

Thank you for your support.