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Where Taxpayers and Advisers Meet

Inheriting buy to let property

Joined:Tue Dec 16, 2014 8:20 am
Inheriting buy to let property

Postby kanrent » Thu Aug 26, 2021 7:14 am

Hi I'm a non resident British citezen, if I leave my buy to let property worth £450,000 to my daughter who is a non resident non domicile British citizen how much IHT would be payable?
And would CGT also have to be paid?

Joined:Fri May 16, 2014 3:47 pm

Re: Inheriting buy to let property

Postby AGoodman » Thu Sep 02, 2021 1:26 pm

It depends?

If you are UK domiciled or deemed domiciled at your death (albeit non-resident) then you will be liable to UK IHT on your entire estate, not just the assets in the UK.

If you were not UK domiciled or deemed domiciled at your death AND you had never lived in the property as your main residence:

- if you were unmarried, divorced or married (but not widowed) when you died, your estate would pay 40% * (£450,000-£325,000) = £50k
- if you were widowed and your late wife had not used her nil rate band, the combined nil rate bands would be £650k so no tax to pay.

If you have lived in the property then you may be able to claim the additional (residential) nil rate band so avoiding IHT entirely.

Return to “Inheritance Tax, IHT, Trusts & Estates, Capital Taxes”