inheritance tax with right of residency query

looptheloop6

Hey, a family member of mine has inherited a share of a property in a will from his sister however their brother has been given rights of residency in the property for the rest of his life (he did not receive a share of the property). There is now an inheritance tax bill due but there is no means to be able to pay it and the property cannot be sold to pay it due to the rights of residency. Has anyone come across this before and have any advice please?

Water John

The value of the inheritance is dramatically reduced, since the property cannot be used or disposed of. A good accountant and solr needed.

Certainly, seen where house and farm, inherited from distant relatives but with right of residence attached, seriously reduced the tax burden.

Spanish Eyes

I think a "right to reside" is different to exclusive use which equal a life interest, therefore no inheritance tax for the beneficiary of the house until the person dies in the case of a life interest.

A right of residence can be transferred to another property or bought out. There are tables available on Revenue website for the value of this.

What has a solicitor said? First call really, we cannot be relied upon for anything other than opinion.

looptheloop6

thanks for your reply. A solicitor is involved with the will but basically told my family member that there was nothing they could do about it and if it couldn't be paid there would be huge levies attached to until a time when property can be sold. Think I might suggest to them to talk to another solicitor.

Water John

The case I allude to was a family case, not heresay. New Solr and acc if they aren't up to scratch. Property is relatively valueless as it is.
If you are acquainted with an Auctioneer, she/he possibly has been asked to value such properties in the past.

I think as above, right of residence is transferrable to another property but that is only with the goodwill and consent of the person involved. Revenue cannot order or suggest that. Value is a fraction of its sale value. Its only value is, if the person decides to move into it also and use it as their residence.

scheister

surely the right of residency seems that the OP's family member is not beneficially in possession of property. So would the tax not be delayed till they do become beneficially in possession or am i mixing this up with something else?

looptheloop6

I agree Scheister.....it just doesn't sit well with me that nothing can be done even though there is technically no benefit to my family member until his brother dies. I will suggest they speak to another solicitor and accountant as I do not have faith in the solicitor that is currently being used.