Effect of Home Income plan on IHT declaration

[sotonman]

Can anyone please assist regarding the correct valuation of my decesased father's house for probate/IHT?

In 1991 he signed a deal with a finance company to give them the title to the property but leased back him for the remainder of his life. In return they paid him a monthly income (less £1 a month rent) and his estate will get 50% of the proceeds of the sale. The instruments that I can find consist of a lease, a policy and a declaration of trust.

Following his death the finance company gave us notice to quit the property and they will now sell it and give us 50% of the proceeds less expenses.

Should I enter the full estimated market value (with other assets this will take us into IHT territory) or the 50% (with other assets about £5k

below IHT territory)? I should hastily point out that none of the beneficiaries of my father's has any link with the finance company and my father lived there on his own.

[cranleys]

Hi Soton man

You should put the 50% holding which was in his estate.

Always available to assist.

Colin Davison
colin.davison@cranleys.co.uk

Inheritance Tax Secrets 2005
"Excellent book, must read"

Cranleys Chartered Accountants & Property Accountants
01256-766655
07766-714000

Always seek good professional support before making any decisions - individual specific advice is needed due to the complexity of individual circumstances.