Readers’ forum: Inheritance tax

A married parent gifted their child the family home but continued to live there with him.

During this time the married parent did not pay market rent for their occupation. When the parent eventually died the house was worth more than the residence nil rate band. Inheritance tax has become payable as the house was a gift with reservation of benefit.

Through a deed of variation it was arranged that the child passed the house to the deceased’s surviving spouse. Would this be counted as a transfer between husband and wife and be treated as exempt from inheritance tax? Is any inheritance tax then payable by the deceased’s estate or the surviving spouse on the house?

I look forward to readers’ responses.

Query 19 861 – Confused.

Only or main residence relief should be available on the child’s disposal.

Unfortunately any property that is subject to a...