Inheritance tax question.

[CaffeineInfusion]

I have spent ages searching online for an answer...

I own my own home. A recent inheritance means that I now own a second home, complete with older relative in situ. All fair enough, she gets to live there for life, I get to keep an eye on her.

However. My question is, should I predecease her, as the total value of my assets are now over the inheritance tax threshold, where would my children stand regarding the tax bill?

Can a charge be put on the second home, so it's paid after her death? This could be years away. Would the taxman wait that long?

Any options as to what my kids could do without losing their home because of a tax bill??

Thank you.

Could you let us know what the value is and what it is over the limit. Is there any cash available? Afraid it would be valued as part of the tax on your death unless it goes to your spouse. There may also be other implications if your kids are under 18. Bear in mind the threshold before you pay iht if it involves property is now 500k as long as your direct descendents inherit.

The tax man do expect payment within a short time and it won't be years.

No spouse.
Total property 650k
Maybe 20k cash
Hopefully kids over 18...

It's likely you won't end up with too much in iht and could probably borrow againt the house to do it.
If you don't need to income from the elderly relatives house and want it more as future investment you may want to consider doing a deed of variation on the will to leave it directly to your kids. Although if they don't have homes of their own thst may incur additional stamp duty when they do buy.

I think by the time deductions are taken into account the likelihood of your iht bill being larger than 20-30k is unlikely so it may just not be worth worrying about

Thank you for your comments. Much appreciated. You've certainly put my mind more at ease.

I worry for my kids as they both have autism and don't deal well with stress. Plan of action now, (a) try and work out more exact figures (b) don't die.

If you're looking at the second property as a long term inheritance for your kids consider putting it in a trust for them. Then your house plus cash would likely be well within IHT threshold of 500K.