Inheritance Tax / Stamp Duty

M

mkeighley

Guest
Could anyone tell me the most tax efficient way to complete the following transaction?

My father-in-law owns his home (worth approx. 250k).

When he dies it will be split 3 ways equally between my wife, & her brother & sister.

My wife and I are intending to sell our home, buy my father-in-law's house and move in with him, and buy out her brother & sister. My wife would then become a full-time carer.

We would all prefer to pay as little tax as neccessary.

Should my wife & I pay her brother & sister direct and receive the house as a gift; or pay the full price to my father-in-law and let him divide the money; or are there other options?

Can anyone help?
 
It is more tax efficient to inherit rather than to take as a gift.
As no cgt or stamp duty arises on a death.
As the inheritors will have the high parent/child threshold there should be no CAT.
When you buy out the siblings they will be deemed to have acquired the property at MV so they should nt have any cgt on disposal .

However as it is your father in laws Principal private residence he would pay no cgt if he gifted the house but you would pay stamp duty on acquiring it
 
Thanks for reply,

I've been doing a bit more digging & I've found that the stamp duty is zero if the house value is less than 127001 , so we're probably going to buy the house at that value and then gift the balance to my wife's brother & sister.
 
You pay stamp duty on the market value of the house (250K) and not on an agreed value ( I.E. a notional 127k)to avail of stamp duty thresholds.

mf
 
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