Should she or shouldn't she?
My mother is 79 and relatively fit and well. Should she transfer her home into my name in case anything should happen to her in the near future (e.g. needing to go into a home/moving in with us, etc.)? The current value of her home is approximately £120,000 as it needs a lot of alterations. Is it worth doing considering the value or not? I realise she would need to survive for at least seven years from transferring the property.
Arthur Weller replies:
If your mother does not have additional assets besides her home that bring the value of her total assets (including gifts in the previous seven years) to £325,000, she does not really need to concern herself with inheritance tax (IHT). If so, there is no point in transferring the house to you. It is true that the value of the house could rise from its current value of £120,000, but this will only be a matter of concern if she is relatively close to £325,000. Furthermore, she may have available the IHT nil rate band of £325,000 from your father. Furthermore, if she continues to live in the house after gifting it to you, then this will be a ‘gift with reservation’, and cancel the IHT benefits of gifting the house.
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