Inheritance tax query

17togo

My wife an I are moving house and moving in with her parents to help care for her mother. We are both selling our homes and buying a bigger house. We are getting a mortgage for more than half of the value of the house and my wife's parents are giving the rest from the sale of their house. It's being gifted to my wife and it's under the taxable threshold for inheritance tax.

So my question is if we will be caught for tax because it is going towards the purchase of our house. We have been told it may be wise to put just my wife's name on the deeds for a couple of years to avoid any tax implications. We're probably gonna get official advise off an accountant anyway but just interested to know beforehand. I'd have thought the money is being gifted to their daughter and what she can do what she wants with it. And then there are no tax implications between husband and wife?

Thanks in advance.

thegolfer

17togo wrote: »

My wife an I are moving house and moving in with her parents to help care for her mother. We are both selling our homes and buying a bigger house. We are getting a mortgage for more than half of the value of the house and my wife's parents are giving the rest from the sale of their house. It's being gifted to my wife and it's under the taxable threshold for inheritance tax.

So my question is if we will be caught for tax because it is going towards the purchase of our house. We have been told it may be wise to put just my wife's name on the deeds for a couple of years to avoid any tax implications. We're probably gonna get official advise off an accountant anyway but just interested to know beforehand. I'd have thought the money is being gifted to their daughter and what she can do what she wants with it. And then there are no tax implications between husband and wife?

Thanks in advance.

Parents gift to your wife, there are no tax implications, unless it's over the threshold, taking account of lifetime gifts etc.

She can then gift to you tax free, or towards the purchase of the house, though there must be a clear flow of cash, ie into her own personal bank account, not a joint account first, then cash can flow into a joint account second.

As backup to the gift the solicitor should recommend to draw up a gift document, from parents to daughter. Inter spousal transfers are not required unless you're Sean Dunne.

Also consider for the parents to gift in 2019 before the year end 3000 to you and your wife. That's 6000 each, as gifts which will not come within the annual thresholds, and are tax free, just in case when they pass away in future years, the inheritance exceeds the thresholds. This can be done annually, and also gifts to the kids under similar principle's.

17togo

thegolfer wrote: »

Parents gift to your wife, there are no tax implications, unless it's over the threshold, taking account of lifetime gifts etc.

She can then gift to you tax free, or towards the purchase of the house, though there must be a clear flow of cash, ie into her own personal bank account, not a joint account first, then cash can flow into a joint account second.

As backup to the gift the solicitor should recommend to draw up a gift document, from parents to daughter. Inter spousal transfers are not required unless you're Sean Dunne.

Also consider for the parents to gift in 2019 before the year end 3000 to you and your wife. That's 6000 each, as gifts which will not come within the annual thresholds, and are tax free, just in case when they pass away in future years, the inheritance exceeds the thresholds. This can be done annually, and also gifts to the kids under similar principle's.

Thanks. Yeah we already got a gift letter signed during the mortgage application. And we don't have a joint account so yeah it would be going just into her account. Can I quote you if the taxman comes calling? 😉ðŸ˜