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My mum's house

(7 Posts)
mrsmummy Thu 01-Oct-09 16:31:36

Hi,Not sure whether I am in the right place or not but wonder if someone can help/point me in the riight direction.4 years ago, my mum transfered her house over to my sister and me,the deeds are now in both our names.We currently each have a mortgage on our own houses as well.In July my mum passed away,the estate as such was sorted without going through probate as her savings were under the threshold and the house in our names. The house is currently up for sale,we have had an offer which we have accepted so when/if the sale goes through are we liable for any form of tax - thanks

sleepwhenidie Thu 01-Oct-09 16:38:12

Hi - sorry for your loss. I am not a tax expert but think that because the house was gifted to you less than 7 years before your mum died then the money you get when you sell it will be subject to inheritance tax if it is more than the threshold of £325,000. Is that the case?

welshdeb Thu 01-Oct-09 16:41:29

Think you will be due for capital gains tax.

sleepwhenidie Thu 01-Oct-09 16:46:15

Just been having a look at the government website and it looks like welshdeb is right - it takes a bit of following but if you have inherited a house that is not your main residence and then you sell it, the gain is taxed as a capital gain, so inheritance tax and its thresholds then become irrelevant...

here

mrsmummy Thu 01-Oct-09 16:48:41

hi,that was quick thanks, we have accepted an offer of £95,000 - it needs a lot doing to it, with have a look at that link now, thanks again all of you

mrsmummy Thu 01-Oct-09 16:56:15

hi have looked at that link and we may be ok, as the house was valued at £95,000 when she xfered the deeds to us

LSEE Thu 01-Oct-09 17:08:44

I'm afraid it's not quite right to say that inheritance tax becomes irrelevant - if you transfer a property as a gift and then die within 7 years of the transfer, inheritance tax will be payable on the gift if its value exceeded the IHT threshold (£325k) - www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm#4. If the house is only valued at £95k then you should be ok on that, likewise you wouldn't have needed to pay stamp duty on the original transfer as it is below the stamp duty threshold. You will need to pay capital gains tax on any rise in value as the previous poster has said.

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