IHT Issue?

In message , Jeff writes

Yes. almost. It isnt a 'taxable gift' but a Potentially Exempt Transfer and will be added back into the estate if the father dies within 7 years. Only the amount in excess of the Threshold for IHT will be taxable and the amount of tax due on the excess reduces from year 4 onwards.

The assessed true value less the consideration paid ( = P) will be added to the estate. If P is greater than the threshold for IHT as at the date of death then the excess will be taxed and the brother will be liable but they would chase the estate if they couldnt get the dosh from him.

More importantly though, P is looked at first when assessing the estate for IHT and uses up the Nil Rate Band first, thereby meaning there is more tax due on the residual estate than would have been. So if P Also, how likely is it that this sort of transaction will be brought to

It would be an offence not to disclose it.

Whoever applies for probate.

Ditto.

Many thanks for that helpful reply.

Might I ask a follow up.

I think my brother-in-law has in mind to rejoin the land he bought to the rest of the property (ie house and remaining garden) once the inevitable happens. Assuming that the property was willed equally to him and his two sisters (inc my wife) would he be able to able to force his sisters to sell their 2/3's to him?

Thanks again Jeff

A few other things to consider:

Are there any CGT implications here? I am thinking not so much of the soin's ongoing CGT liability if he sells the land, but rather the father's potential liability. the PPR exemption does not automatically apply if you sell of a piece of land that was part of your garden. IIRC if the area is over 0.2 hectare you need to get agreement from the Inland Revenue.

Also, in general, if there are no dependants, then the father can give away assets or leave them in his will, to whomever he likes. He does not have to be 'fair' about it.

There might also be implications if father needs care paid for by the local authority and he has recently disposed of assets at below market value.

Robert

In message , Jeff writes

No.

Thanks

Would anyone like to comment on how disagreements in these cases are usually resolved? For example, can a sale at market value be forced by any party?

Jeff

In message , Jeff writes

Only by going to court and asking to judge to decide.