Tweet
Around 20 years ago my parents had a house built next door to our house in the garden. The second house has been let out to tenants, and my parents have of course been paying tax on the rental income, and the tenants have also been paying their own council tax. Nevertheless both houses are on a single title deed, which was never separated -- more out of laziness than anything else.
FYI, one house is worth approx. £500 000, in which we live as a family. £400 000 is the value of the second, letted property.
We are now in the process of inheritance planning. My parents jointly would have an allowance of up to £1m to pass on tax-free, including the value of a single residential property.
The situation prompts some questions:
- can both houses be considered a single residential property for inheritance tax purposes, as things stand, given there is a single title deed?
- can both houses be made to be considered a single residential property, if need be, by no longer letting out the property, removing tenants and treating both houses as a single unit?
I suppose this depends on what counts as a single property -- presumably the title deed at the land registry is the most important factor? or does the fact that council tax has been paid separately create a legal fact that these are two houses? Is this reversible?
Thank you in advance for your kind and expert advice!
FYI, one house is worth approx. £500 000, in which we live as a family. £400 000 is the value of the second, letted property.
We are now in the process of inheritance planning. My parents jointly would have an allowance of up to £1m to pass on tax-free, including the value of a single residential property.
The situation prompts some questions:
- can both houses be considered a single residential property for inheritance tax purposes, as things stand, given there is a single title deed?
- can both houses be made to be considered a single residential property, if need be, by no longer letting out the property, removing tenants and treating both houses as a single unit?
I suppose this depends on what counts as a single property -- presumably the title deed at the land registry is the most important factor? or does the fact that council tax has been paid separately create a legal fact that these are two houses? Is this reversible?
Thank you in advance for your kind and expert advice!
Comment