IHT & SDLT on transfer of property‏

[matt20uk]

My grandfather died recently and left all of his property to my grandmother, who is the sole beneficiary of his will.  The total of my grandfather's estate was below the £325,000 IHT threshold.  

The executor of my grandfather's will has applied for and received a grant of probate. There was no IHT to pay.

To our surprise, my grandfather/grandmother's residential dwelling is registered in my grandfather's sole name at Land Registry.  Instead of transferring the property into my grandmother's name, we would like to transfer the property directly into the name of my mother and uncle (my grandmother's children and the sole beneficiaries under my grandmother's will). The reason for this transfer is that we all feel that it will make life a bit easier when my grandmother eventually dies. For the time being, my grandmother would continue to live at the property, unless she is no longer able to do so on her own. It is likely that when my grandmother dies, her estate will be below the £325,000 IHT threshold.

Will there be any IHT/SDLT/any other tax due on the transfer of the property directly into my mother's and uncle's joint names? The transfer would be a gift/for nil consideration.

Furthermore, would anyone be able to point me right direction for the actual mechanics of the transfer? Land Registry form AS1 seems like it could be the appropriate form to use, but I'm not sure.

Many thanks in advance.

[maths]

Not sure that things will be easier on death of grandmother implementing your suggestion.

However, the transfer of the house to uncle and mother requires either a gift by gmother (following her inheritance) or the execution of a deed of variation (DoV) by her in favour of uncle/mother.

No SDLT arises under either option as no consideration passes.

As gmother going to live in property more attractive re CGT if she owns it and then leaves it to uncle/mother on her death.

In short seems preferable for her to inherit house.

[matt20uk]

Hi maths

Thanks for the reply.

Let's say the property is worth £200k and my grandmother's total estate is £250k. Assuming those values don't change over the next seven years, would there be any IHT due (either now or on death) if my grandmother gifted the property to my mother/uncle now?

What would be the CGT benefit of my grandmother owning and living in the property until death?

Thanks again

Matt

[maths]

Let's say the property is worth £200k and my grandmother's total estate is £250k. Assuming those values don't change over the next seven years, would there be any IHT due (either now or on death) if my grandmother gifted the property to my mother/uncle now?

No, as her estate is below the IHT £325,000 threshold.

What would be the CGT benefit of my grandmother owning and living in the property until death?

If she owns and lives in the property then on her death your mother/uncle inherit at its then mkt value (no CGT on death); if they then sell it no CGT as value post death will probably have changed very little.

If gift made now to uncle/mother then on any eventual sale a CGT liability arises on difference between sale price and value of property at date of gift.