Gift Tax?

Inheritance tax is only payable if the total of your mothers assets are presently over 275k. If her total is less than that (and that includes the value of her house) no IHT is payable.

If her assets are above 275k then I am afraid she will not escape it by signing it over to the children because it falls within a special category of gift known as a "gift with reservation" so would be drawn back into her estate value for calculation of inheritance tax. If she gives the gift outright and lives somewhere else then she has to survive 7 years from the giving of the gift for it to become an exempt gift. The gift is called a Gift with reservation because she continues to enjoy the benefit of the accomodation it offers.

There is I believe one way around this problem and that is to get her children to buy the house at an arms length deal, then following the sale, she can give the children the money, however she still has to survive 7 years from the date of the gift. The children can then allow her to live there rent free.

In message , biggirlsblouse writes

And Pre Owned Asset Tax may be levied on her for deemed benefit of living in the house rent free.

Nope, because then it comes under the pre-owned assets rule. In that case, the children would have to pay tax on the rent they should have received from their mother.

And presumably liable for capital gains tax on their appreciating asset?

Only if it is sold before death.

Would it make any difference if seven years passed before death, presumably taking it out of the IHT domain, any CGT liability then (after the