Buying a house from a parent

Hi,
I'm just interested in finding out a couple of facts regarding the above. My wifes grandmothers home will be left to her mother soon. Her mother has informed us that she will sell the home to us. My questions are;

1. Does the house have to be professionally valued and sold at that price or can she decide to sell it at a lower price than the valuation?

2. What are the Tax implications, ( does she/we have to pay inheritance tax)?

I've been informed by a friend that she has to have it professionally valued and sold at that price, she cannot sell it to us at a discount. I find it difficult to believe that, that's why I hope someone can shed some light on this for me!

Many thanks,

1. She can sell at any price she likes. A Valuation will be required because there will be a stamp duty liability and stamp duty is payable on market or actual value.

2. Depending on the value of the house, your mother in law may have a liability for Inheritance or Gift Tax when she gets the house and if she sells on she may have a liability to Capital Gains Tax.
You and your wife may have a liability for Gift tax and Stamp Duty.
Specifically, if house is gifted to daughter only that will reduce the stamp duty liability - related parties pay a lesser amount but this does not apply if an unrelated party ( i.e. you to your mother in law) is a party to the transaction.

mf