My sister currently lives with and cares for my 86 year old grandmother. The family has decided that my sister should inherit her house. However we have recently learned of the changes to the 2016 dwelling house exemption which no longer mean this is possible.
During the time of the last recession the house was valued at about 400,000 , at this time it was transferred from my grandmother to my father. He paid a small amount of tax at the time. My grandmother has continued to live in the house and my father does not and owns his own home in another county.
Ideally my father would transfer the house to my sister so she could continue to live there in the future. However the house is now valued at 900,000 and even with her full category a threshold my sister would be left with a bill of nearly 200,000 which is money she doesn’t have.
Does anyone see solutions to this problem? The house has been in the family for generations and ideally would not be sold.
it strikes me that if my grandmother still owned the property that my sister could inherit it from her will with no tax implication as she has been living there for the required number of years, doesn’t own any other property and would intend to live there for the foreseeable future.
Another issue I see is that as this is not my fathers primary residence he could be liable for capitsl gains tax on the considerable value increase on the property.
is there any way the initial transfer from my grandmother to my father be reversed. From what I can see a transfer from a child to a parent falls into category B in the capital acquisitions thresholds so is of no help. I’m just hoping there me some exemption when it comes to reversing a previously mad gift. I know this is a long shot but thought it would be worth asking.
We do of course intend to get professional advice, but would be interested to get some insight if anyone has any ideas.
During the time of the last recession the house was valued at about 400,000 , at this time it was transferred from my grandmother to my father. He paid a small amount of tax at the time. My grandmother has continued to live in the house and my father does not and owns his own home in another county.
Ideally my father would transfer the house to my sister so she could continue to live there in the future. However the house is now valued at 900,000 and even with her full category a threshold my sister would be left with a bill of nearly 200,000 which is money she doesn’t have.
Does anyone see solutions to this problem? The house has been in the family for generations and ideally would not be sold.
it strikes me that if my grandmother still owned the property that my sister could inherit it from her will with no tax implication as she has been living there for the required number of years, doesn’t own any other property and would intend to live there for the foreseeable future.
Another issue I see is that as this is not my fathers primary residence he could be liable for capitsl gains tax on the considerable value increase on the property.
is there any way the initial transfer from my grandmother to my father be reversed. From what I can see a transfer from a child to a parent falls into category B in the capital acquisitions thresholds so is of no help. I’m just hoping there me some exemption when it comes to reversing a previously mad gift. I know this is a long shot but thought it would be worth asking.
We do of course intend to get professional advice, but would be interested to get some insight if anyone has any ideas.
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