Property and Savings

[dave771en]

I am querying on behalf of a friend who is around 70 years old. Her husband died few months ago and they had a property (worth around £440K) in joint names. They also had some savings around (£150k) in joint names. She is now selling her property and she wants to buy a new property (around £550k) in her only son's name. Her husband didn't have any will. Could you please explain if this will trigger any inheritance tax for her or for her son?

Thanks in advance.

[AnthonyR]

If your friend has assets of ~£590k and everything passed to her due to joint accounts then her assets are below her available nil rate band once his unused nil rate band is transferred (£650k in total). As such, she has no IHT to worry about with the gift or otherwise (assuming current values).

Why is she buying (I assume) her new home in her son's name? If it's to try and avoid care fees in future it's likely that a local authority would treat it as deliberate deprivation. Equally this is a gift to her son and she's going to be living in it without him then it's creating an unnecessary CGT exposure.

On top of this, if the value of her estate grows and exceeds the 2x nil rate bands in future the fact that she doesn't have a home to leave to children means she may not benefit from the additional residence nil rate band (although she may be able argue downsizing relief).