Inheritance Tax

[Chris8282]

Advice please on what we will need to do

my auntie who is 85 is leaving me and my brother 14 properties what she rents out when she dies these are worth around 1,300000 the is no
mortgages on these properties they are all owned outright.

she has her home what’s worth 300k and savings of 600k also to us . So total estate is worth 2,200000.

will the business/properties get taxed at 40% , and will her home need to be sold .

Thanks
Chris .

[des8]

Assuming the properties are owned by your aunt and not through a limited company, on her death they will be part of her estate and IHT will apply.
If she sells them before her death, CGT will be payable, and then the sale money will be part of her assets and attract IHT.
If she was to give them (or any sale money) away that would attract IHT on a sliding scale for a period of 7years

Although business property relief does exempt a business from inheritance tax she cannot just set up and transfer the properties to it without incurring CGT.
But also a business dealing solely with properties cannot claim business property relief, so IHT would be payable.

Sorry, but no easy legal way not to pay the tax
But at least the single person’s threshold of £325,000 should apply

[Chris8282]

Hi , yes the properties are owned by my aunt she’s had the since the 1970’s and not registered as a limited company.

What are we looking at regards the inheritance bill I worked out online it could be 700k but not sure if I’m filling it in correctly.

1,3 million property business
550k in bank
the house she lives in 300k - 350k
she’s leaving 100 k to charity .

roughly total estate 2.2 million

tax bill 880k

so we may need to sell properties to pay the tax bill

what does the 325k threshold mean ?

Regards Chris .

[des8]

First £325,000 of the estate is free of IHT, more possibly if she was married
https://www.gov.uk/inheritance-tax

[Chris8282]

As she is leaving her house to me and mother does that not out the threshold up to 500 K ?

thanks for your advice .

[des8]

Not unless you or your mother are one of your aunt's children!

With an estate of the size and complexities of your aunt it might ber worth taking professional advice