My 84yr old mother has two residential properties with a total value of approx—£ 1.4m. My father passed away intestate. Both properties passed directly to her. Applying joint RNRB £350,000 and joint NRB £750,000, it leaves £400,000 on which 40% IHT applies - £160,000 due to the tax authorities.
One property is empty, the other rented. My mother lives with me and has done so for a couple of years. I think she should gift the empty house (both of equal value) to one of her children now, for application of the seven year.
My brother believes RNB/IHT could change tomorrow and disagrees. He thinks she should transfer a percentage of each house up to a joint value greater than £400,000 to her children now. So, when sadly she passes, we will already be stakeholders, and RNRB and NRB will apply to her estate, the percentages held in both houses passed to us in her will.
Legal fees overall aside are both options the same – i.e. £400.000 – IHT due £160,000 reduced after three years. I fear I am missing something in my brother’s alternative that would have me say no.
Appreciative of any comments.
Thank you
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