urban

iTrader: (1)

Folks,

I have pretty much no knowledge in this field.
So here goes.
Father died couple of years ago, and left family home split equally between myself & brother.
House is worth approx 200K and fully paid for.

1st Question - Am I liable for any taxes?

2nd Question - Am I supposed to declare this to the taxman?

3rd Question - If my brother signs his shares over to me, again am I liable for taxes?

Thanks,

Shaun

OllyK

I'd get in touch with a local IHT Adviser. IIRC it is the total value of the estate that needs to be taken in to account, i.e. buildings, accounts etc etc. If that exceeds the tax band (IIRC circa £250K) then the estate will be taxed and the remainder dished up between the recipients on the will. I could of course be wrong!

The Snug Rhino

Whats been going on for the last 2 years? If the hosue was the only asset then no IHT was ever due - if he left a £300k painiting to someone else 5 years ago then you and bro will loose £80k......so who sorted out his esate? these are simple questions for the executors.

Assuming it was all done fine and you inherited with no IHT due then your only tax is if you get rid of it and its not your main home (which it sounds like it is?)

So odds are...no tax anywhere.

urban

iTrader: (1)

Whats been going on - nothing at all.
Solicitor done everything - he split up the monies & the house between the various parties from a will.
I signed a few letters from the solicitor - never remember seeing anything inland revenue related.

Its not my main home, brother lives there though.
So reading between the lines, if he signed his shares over to me I wouldn't be liable for IHT initially.

When its sold then, in simple terms how does that work from my point of view i.e. tax?

Thanks a lot.

Shaun

OllyK

I'm sure SR will correct me if I'm wrong, however, it sounds like the solicitor has dealt with things. It will be the "estate" that pays the IHT based on its total value, i.e. the tax man will take his cut then the remainder is handed over. If there isn't enough in the estate to incur IHT then none will be payable, sounds like your situation. If you sell a second home then I believe capital gains tax will be the issue, not IHT.

Mark Miwurdz

If £200K is the final figure, then the answers are:

1. No
2. No
3. No

The nil rate band for this fiscal (07/08) is £300K.

Cheers
Kav

Deep Singh

Excuse me! That answer is too clear and understandable, could you please make it sound more complicated?

The Snug Rhino

Interesting but not relevant, this chaps dad died two years ago (just to be picky )

BOT - are you saying you both own a half of the house each but only your bro lives in it?

CharlesW

Shaun,

You say the house was left to you and your brother. Are you "joint tenants" or "tenants in common". This is important. If you are "joint tenants" then the property passes to the survivor if one of you dies. If you are "tenants in common" your half of the property passes to your descendants, if you die.

If the property is sold then any profit if any is subject to capital gains tax, if it is not your primary residence. The profit will be the difference between the Probate value and the price the house is sold for. You should ask the solicitor for the Probate value. That is the value reported to the Revenue for IHT. It is usually as low as you can get away with to avoid increasing the IHT liabilty.

urban

iTrader: (1)

Yep - Spot on.

Charles, I shall check the probate value with the solicitor.

Thanks All.

Shaun