IHT - Pay before or after property passed on?

[shmoo]

If my father is passing on a property to me (via will) and there is a IHT bill on his estate would I be able to remortgage the property (which he has passed to me) in order to pay the IHT bill?

Or am I unable to remortgage the property because I haven't paid the IHT bill and therefore my dad's asset cannot be transferred to me?

Thanks.

[maths]

If my father is passing on a property to me (via will) and there is a IHT bill on his estate would I be able to remortgage the property (which he has passed to me) in order to pay the IHT bill?

No.

Or am I unable to remortgage the property because I haven't paid the IHT bill and therefore my dad's asset cannot be transferred to me?

Correct.

[AnthonyR]

This is always a nasty catch22 for clients with properties that they want to pass on, with IHT/mortgages in place.

You can't get the property until you pay the tax, you can't pay the tax until you get the property. It's then complicated further by the mortgage position.

You may be able to pay the tax by 10 yearly instalments, which makes the first payment a bit more manageable, you may need to get bridging finance to cover the costs.

It's a messy and painful system, but it is what it is.

Just a thought though - is your mother/father's wife still alive? If so then it might be possible to vary the will, pass the asset to her (which removes the IHT issue on that through spousal exemption) then have her gift it to you. Not a perfect solution, but may be an option.