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gruffydd

Inheritance Tax

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Sorting out potentially exempt transfers should surely be a priority for those fearing a massive inheritance tax bill. But was wondering - do recipients pay income tax on potentially exempt transfers - be it cash sterling or property (if the donor of the cash / property dies after 7 years and - with regard to property - pays a market rent to the new owners!).

Edited by gruffydd

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Sorting out potentially exempt transfers should surely be a priority for those fearing a massive inheritance tax bill. But was wondering - do recipients pay income tax on potentially exempt transfers - be it cash sterling or property (if the donor of the cash / property dies after 7 years and - with regard to property - pays a market rent to the new owners!).

I am no expert, but yes, I think that recipients pay tax on income generated by assets transferred (there used to be anti-avoidance re assets transferred to children - parents still taxable). And if the donor dies within the 7 years there is IHT.

If you transfer your home - yes, there is the issue of having to pay market rent taxable on the recipient.

One idea I have seen is donating the residual freehold after retaining a lease of x years, where x is hopefully greater but not too much so than the donor's life expectancy. Tricky, but if this works, the value of the gift is low at time of donation, but residual assets and IHT reduce over time. You'd better make provision for your partner and trust your heirs though. And I think there may be stamp tax as a big up front cost, so this is not a great idea for everyone.

Simplest thing for most people is sharing ownership between married couples - not much extra risk given divorce law today?

Apologies for any errors and omissions in the above.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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