Venues required by law to record contact details Recording Contact Details The Governments’ new requirements for businesses mean that premises…
Over the last few years, we have seen house prices soar. Depending on which side you’re on, this was either a shock or a pleasant surprise. Generations X and those before have witnessed the value of the properties double even triple. So how can this generation tax efficiently pass their home onto their children or grandchildren?
Here are a few things you should take into consideration before signing your property over.
Inheritance tax (IHT) is charged on your entire estate, if the value is over £325,000 the tax rate increases to 40%. Please note there are exceptions to this.
To reduce the rate of the tax paid, you could gift your property. There is no IHT tax is paid if you survive 7 years after gifting the property, if you were to pass away before this time the estate would be taxed (IHT).
If you sign your home over but continue to live in it (gift with reservation of benefit) the house will remain as a part of your estate upon death. A way to get around this is to pay rent to whomever you have gifted the property at the market rate. Please note this will be tax as an added income.
Capital gains tax is applied to ‘investments’ such as second or holidays homes if they are sold during probate since your death. The tax is calculated on how much the value has increased.
Once you sign your property over you are no longer the legal owner, meaning you could be evicted. It is also worth taking into consideration that if your child is married that his or her partner has rights to the property. Meaning your child’s ex-partner can claim against your estate.
If your child falls into debt files for bankruptcy the property can be repossessed by creditors.
If you have assets over £23,250 (in England) your local council could use your property as a means of making payment. You can transfer assets to children although this may lead to ‘deliberate deprivation of assets’ and the council could release the transfers and obtain fees.
If you need assistance please contact us on 01295 477 250 alternatively you can email email@example.com.