Purchase of parent's house as part of IHT

[MickB]

Hi Tony,

Thanks for your comments. Yes, we have used some of our money on the renovation, although we haven't kept any receipts so wouldn't be able to prove it.

I haven't charged my mother for the time spent doing the work either - it didn't really cross our minds to do so! You're right that my siblings will benefit from the work done, and this was part of the plan; to hopefully provide them with the sort of legacy our father had hoped for.

Does the money we spent on the property deduct directly from the estate? Also, if we were to say that my mother 'owed' us money for the work done, can this also be removed from the PET?

Thanks again for your comments,

Mike

[tonygough]

Naturally each case is individual and without knowing all of the exact circumstances we shouldnÂ’t comment,

Your mothers Will could specifically state that in respect of the work done a specific amount should be paid to you; then the remainder of the estate equal distributed between you and your siblings

We need to be careful of payment for work done as this could effect your current taxation

We are currently working on a number of cases where a mortgage was raised to buy a share in the parents home as you are living in the house that should not be too difficult; then the money raised by you and given to Mother is invested into a discounted gift trust and the income is paid to you as rent this pays the interest off the mortgage, money was used to develop the property there for you should be covered in that respect.


Tony Gough
Principal
New Forest Financial Management // The Mortgage Wizard.co.uk
1 Velvet Lawn Road
New Milton
Hampshire
BH25 5GE

01425 629894 www.ukfinancial.co.uk