My parents, sister and I have always lived together and are currently moving house. My parents own the house, with no mortgage. My parents are gifting the entire sale value of the house (£500,000) to my sister and myself. My sister and I are then using that money (and a mortgage £196,000) to buy a new house for the 4 of us to live in. The house deeds will then be in my sisters and my name, but with our parents still living with us (they will not pay rent). My sister and I will then be responsible for all the maintenance and utility costs in relation to the house. In addition, my parents are gifting my sister and I £20,000 each, which my sister and I plan to use to pay stamp duty, solicitors etc. Based on my solicitors advice we have asked my parents to sign paperwork to say that they have no interest in the house (.i.e. my sister and I can throw them out if we ever wanted). I was just wondering, under these circumstances, if anyone could tell me whether you think the house value gift (£500,000) will be considered a gift without reservation. I'm not convinced that this is the case. Having tried to look into the matter myself I am aware that gifts given over 7 years before death can be exempt from IHT, and that the £500,000 is under the current inheritance tax threshold for my parents. But as we are using the money to buy a house, if the house value goes up before death, does the value of the £500,000 gift go up to (perhaps above the IHT threshold)? Is there anything else I can do now to make the £500,000 potentially exempt from IHT?