Inheritance tax threshold on property transfers (in one's lifetime)

[blutooth]

Hello,

My mother has a property worth 500k which she wishes to transfer to me during her lifetime. If she passed away within 7 years (heaven forbid), would I be subject to paying tax on anything over the IHT threshold for children of 425k or would it be the regular threshold for gifts of 325k?

Thanks,

Max

[Lee Young]

She would only be entitled to the residence nil rate band if she had a residence at the date of her death which she passes to lineal descendants.

If she is a widow she might be entitled to up to two standard nil rate bands anyway.

If the gift of the property is one in which she lives and wants to continue to live then it would (in the absence of rent being paid) be a gift with reservation of benefit which would probably mean no IHT savings achieved at all by the gift, but retain her entitlement to the residence nil rate band.

In short, therefore it depends!