Iht question

[DRC-KW14]

Hi LegalBeagles

My father's house is worth about £400,000. We will not get full IHT relief on it as he bought this house in 2015 after my mother died in 2008. If he sold the house to his three children for a nominal sum - say £1 - then he would no longer own the house as far as IHT estate goes. Would this be a legal way to reduce IHT on his estate ? Thank you

[atticus]

You would of course declare the value given as a gift, wouldn't you?

Some cunning plans do not survive even cursory scrutiny.

[PallasAthena]

"If you sell your house to your child for less than its value the difference counts as a gift"

https://www.gov.uk/inheritance-tax/gifts

[Pezza54]

I believe the second sentence in OP's thread is incorrect
As RNRB was not available in 2008, the mother has 100% of the current RNRB (£175K) to transfer. She did not have to be living at the father's present property at the time of her death (just be still married to the father)
This means under IHT rules now in place, the father's estate could have the maximum £350k RNRB and a possible total NRB of £1m
This is dependent on the father leaving his property to direct descendants in his will, the total estate value less than £2m and the mother not using up any of her transferable NRB

[DRC-KW14]

OK thank you. I didn't know about the "gift" statement re house sale to children, so that's pretty clear.

But we will definitely look into PEZZA54's reply in more detail THANK YOU.