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Readers Forum: Family home

01 June 2021
Issue: 4794 / Categories: Forum & Feedback
Inheritance tax on downsizing property for elderly parent.

My client transferred his home into the names of his three children 20 years ago with a view to asset protection ahead of his second marriage.

The family home is now too big for the elderly parent and the family is looking at downsizing his home. The children have always been aware that there would be a capital gain and their current personal positions mean that the tax for two of the three is minimal.

I am concerned about the potential inheritance tax issues. The house is currently worth £380 000 which is going to be considered as part of the father’s estate under the gift with reservation of benefit rules. This value exceeds the standard nil-rate band excluding the property nil-rate band. Is the property nil-rate band still available when calculating the inheritance tax due on an asset subject to the gift with reservation of...

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