Re: RR and JB: "Beneficial" gift of part a property doesn't affect the mortgage...?


"Troy Steadman" <troysteadman@xxxxxxxxxxx> wrote in message
news:1148886104.485995.128010@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Ronald Raygun wrote:

... I did not suggest adding her to the deeds, merely to make her a
co-owner (i.e. beneficial, not legal). This would have no bearing
on the mortgage.

....and...

John Boyle wrote:
...Making X a joint owner (even a mere equitable owner) wont help for IHT
either.

This is something I don't understand, and don't seem to be able to
Google. I have a wife and adult son "Homey", who lives with us, and an
adult son "Romeo", who has left home for good. I am...

1) About to buy 50% of the house I live in and which I already co-own,
from my mother's estate, by taking out a mortgage.

2) The house is valued at £400k by the District Valuer, and £200k is
the 50% price I am paying.

3) Foxtons value the house at around £900k.

+++++
I doubt that R&C would accept a District Valuer figure as representing
current open-market value (nor should the estate's trustees for that matter
if they're doing their job properly). Knock about 10% off the Foxton's
figure for the sort of market valuation you'd get from an Estate Agent's
valuation survey - i.e the sort of survey you pay about £250 for.

If you just assume a £400k value and R&C get heavy later, three things could
happen:

1). R&C will hammer the estate (via the trustees) for the underpaid
inheritance tax on the house.

2). You personally could be looking at a minimum tax charge of £50k-£60k
plus higher-rate, plus interest.

3). A further hefty tax charge will be billed to your son for his
under-valued portion. 'Ouch, thanks Dad'.

The tax bill could run and run. No wonder Gordon's coining it in.

-Neil F.


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