Will I pay tax on this?
Discussion
Last October, Dad died and left 50% of the house to his 3 children.
Mum has the right to stay for life, move house or do whatever she wants.
She has now decided the house is too big (well, the massive garden is too big) and wants to move to town into a smaller place, PLUS, she wants to give us kids some money.
If she sells her house for £535k, buys a new place for £300k and decides to split the £235k between us 3 (£78k each), will I pay tax on it?
Other than the house dad didn't leave much else, and the money he did leave went to Mum.
If it makes any difference, she will leave whatever she has to us 3 when she dies as well, and she is 82
Any advice appreciated.
Mum has the right to stay for life, move house or do whatever she wants.
She has now decided the house is too big (well, the massive garden is too big) and wants to move to town into a smaller place, PLUS, she wants to give us kids some money.
If she sells her house for £535k, buys a new place for £300k and decides to split the £235k between us 3 (£78k each), will I pay tax on it?
Other than the house dad didn't leave much else, and the money he did leave went to Mum.
If it makes any difference, she will leave whatever she has to us 3 when she dies as well, and she is 82
Any advice appreciated.
No, it would fall well below the inheritance tax threshold, which i believe is around £325k per person (and your mum would be entitled to use your dads allowance)
But it might not be as straightforward as 'here's some cash' - the proceeds of the sale might have to come direct as stated in the will.
I'm no accountant or tax advisor btw, so get an expert opinion but i don't see why you'd have to pay a penny in tax.
But it might not be as straightforward as 'here's some cash' - the proceeds of the sale might have to come direct as stated in the will.
I'm no accountant or tax advisor btw, so get an expert opinion but i don't see why you'd have to pay a penny in tax.
Edited by Sim75 on Tuesday 27th September 17:58
Edited by Sim75 on Tuesday 27th September 17:59
If as descrivbed, your mum would not be giving you and you siblings anything, you would be giving to her.
It is not her house, she owns half, you and your siblings together own the other half (you will also want to check if that is as joint tenants or tenants in common).
If she only gives you all together a total of £235k out of £535k you are £32.5k down between the 3 of you (£10.83k each) (50% of £535 = £267k)
The 50% from dad to mum is I think exempt for IHT, and the remainder to children might add to the estate for IHT and so push it just over £325k but as from dad to kids I think that may also be exempt as well.
All depends on the will and getting proper advice I'm afraid.
It is not her house, she owns half, you and your siblings together own the other half (you will also want to check if that is as joint tenants or tenants in common).
If she only gives you all together a total of £235k out of £535k you are £32.5k down between the 3 of you (£10.83k each) (50% of £535 = £267k)
The 50% from dad to mum is I think exempt for IHT, and the remainder to children might add to the estate for IHT and so push it just over £325k but as from dad to kids I think that may also be exempt as well.
All depends on the will and getting proper advice I'm afraid.
pork911 said:
If as descrivbed, your mum would not be giving you and you siblings anything, you would be giving to her.
It is not her house, she owns half, you and your siblings together own the other half (you will also want to check if that is as joint tenants or tenants in common).
If she only gives you all together a total of £235k out of £535k you are £32.5k down between the 3 of you (£10.83k each) (50% of £535 = £267k)
The 50% from dad to mum is I think exempt for IHT, and the remainder to children might add to the estate for IHT and so push it just over £325k but as from dad to kids I think that may also be exempt as well.
All depends on the will and getting proper advice I'm afraid.
Thanks. You are of course right on the splitting of the money, but we are not worried about that. We would be happy if she used all the money on a new home, it is her who wants to give us some now. We get whatever is left at some point anyway, so we are Ok with all that.It is not her house, she owns half, you and your siblings together own the other half (you will also want to check if that is as joint tenants or tenants in common).
If she only gives you all together a total of £235k out of £535k you are £32.5k down between the 3 of you (£10.83k each) (50% of £535 = £267k)
The 50% from dad to mum is I think exempt for IHT, and the remainder to children might add to the estate for IHT and so push it just over £325k but as from dad to kids I think that may also be exempt as well.
All depends on the will and getting proper advice I'm afraid.
Gassing Station | Finance | Top of Page | What's New | My Stuff