Valuing a 50% Share in a Property

[adamh]

Hi,

What is the valuation for IHT purposes of a 50% share of a house which is valued at £3 million for outright ownership?

[RMC]

It depends on the purpose of the valuation and on who owns the other half.

[adamh]

If I sell a 50% share in my house to my son, should he pay 50% of the price the property is valued at?

Or should he pay less than 50% as a partial share is not nearly as valuable as outright ownership?

I want to get the value down for him, but ensure he has paid 'full consideration' for IHT purposes so no gift has occured.

[RMC]

Should your son die, for IHT purposes his 50% share in the property owned jointly with another owner-occupier would be valued at value of the whole less 15% (see VOA website).
Likewise if you die first.

[AdamS93]

If you own a property worth £3m there is potential for you to loose a lot of money and you obviously have the money to pay for tailored tax advice to consider the long-term as well as the short-term implications.

You may think you are avoiding IHT but there are all sorts of anti-avoidance laws such as POAT which could be in play here.

There are also CGT and SDLT considerations.

Depending on what your son plans on doing with the house, there may be income tax implications also.