Re: Tax on Rental Income
- From: Ronald Raygun <no.spam@xxxxxxxxxxxxxxxxxxxxx>
- Date: Fri, 14 Jul 2006 10:35:11 GMT
Robert wrote:
Take care also that if they are not married there will be inheritence
tax implications of transferring ownership (i.e. gifting) of the
property. If the giver dies within 7 years the the value of the gift
is included in the IHT calculation. Also, if you get married later that
does not help. it is whether you were married at the time of the gift
that matters for IHT.
In view of this it might be safer to find a solution where the partner
borrow's money to buy out the house perhaps using an IOU, so that it is
not a gift.
You can't get around IHT liability that easily.
If instead of A giving (a share of) the house to B, B buys it off A for
a cash sum, then A's estate will still have that cash sum lying around
to be taxed (unless A spends it all first, of course).
If B borrows the money from A first, and then uses it to pay A
for the asset, then when A dies, B will still owe the estate the
money, and it will therefore still be taxed.
.
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