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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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My husband and I are pensioners and are having an annexe

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My husband and I are pensioners and are having an annexe built onto our daughter's house. We sold our house in Spain and the proceeds will pay for the annexe. Will we have to pay tax or will my daughter be liable for Inheritance tax. The present house is worth approx. £500,00 and the annexe is £163,000.
JA: Have you talked to a lawyer about this? In which country do you live? If different, which country is your legal question related to?
Customer: We have not spoken to a lawyer yet. We have returned from Spain and are now living permanently in England. We are both English and have lived in Spain for approx. 12 years. We are staying with our daughter in Lavenham, Suffolk.
JA: What steps have you taken so far?
Customer: We have all the plans passed and have received tenders from builders. At this moment in time we are liaising with a builder but have not yet accepted his quote. The money is in an English bank in sterling.
JA: Anything else you want the lawyer to know before I connect you?
Customer: I can't think of anything at the moment - we need to know the best way to proceed, financially.

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

You each have a tax free element of 325K for Inheritance Tax (IHT) purposes. There is no IHT in respect of inter spousal bequests and the surviving partner can inherit the deceased share. This 650K free is possible. However, progressively 2018 - 2020, where the family home is bequeathed to children the tax free element is being increased to half a million and currently stands at 425K. From this a tax free demise appears likely.

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

bigduckontax and other Tax Specialists are ready to help you
Customer: replied 2 months ago.
Thank you for your information. It is very useful at this time.

Delighted to hae been of assistance.

Thank you for your support.