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Where Taxpayers and Advisers Meet

Disabled daughter and our will/IHT

sealives
Posts:5
Joined:Thu Jan 13, 2022 3:09 pm
Disabled daughter and our will/IHT

Postby sealives » Wed May 01, 2024 6:54 pm

Evening all,
Our daughter is quite disabled, she is 33. When she became disabled in 2014 it was not possible for her to live in our family home, so we purchased a flat for her, and she lives there now with 24hr care.
I seem to remember that we received some tax advice at that time which was along the lines of 'there may be a way to exclude the value of the flat from our estate' when we pass away, but I can't remember the exact details.

Does that sound feasible? and if so, is there anything to be done now or incorporated into our will?

Thanks in advance.

bd6759
Posts:4319
Joined:Sat Feb 01, 2014 3:26 pm

Re: Disabled daughter and our will/IHT

Postby bd6759 » Thu May 02, 2024 7:59 am


I seem to remember that we received some tax advice at that time which was along the lines of 'there may be a way to exclude the value of the flat from our estate' when we pass away, but I can't remember the exact details.
There probably was when the flat was purchased, but that was 10 years ago.

AGoodman
Posts:1777
Joined:Fri May 16, 2014 3:47 pm

Re: Disabled daughter and our will/IHT

Postby AGoodman » Thu May 09, 2024 4:12 pm

The only way I can think of is to make a gift of the property to her now, and survive the seven year period so that the gift falls out of your estates for inheritance tax.

Unfortunately, if the property has increased in value, you will make a gain for capital gains tax, which will be subject to tax at 18/28%.

You should be able to avoid this CGT by transferring the property into a trust/settlement for your daughter. So long as it is not a bare trust, you could claim holdover relief on the gift under s.260 TCGA, which then treats the trustees as having acquired the property at the same price you originally paid.

You should take proper advice on this, as with any trust, and there may also be advantages to electing for it to be treated as a disabled persons trust for inheritance tax (which avoids potential tax charges every 10 years).


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