10:51 04 March 2013
If you have property that you want to leave to someone, simply giving it in the form of a gift won’t exempt the property from inheritance tax automatically. There are some pretty strict guidelines to follow if you want someone to have your property without the burden of a hefty inheritance tax.
Here are a few of the things you should know if you’re considering gifting away your property.
•Since it is a gift, standard rules apply and you would need to live seven more years after giving away the property to ensure that it is not included in the value of your estate for inheritance tax purposes.
•If your stipulation involves living there without being charged for rent, it is not treated as a traditional gift and normal inheritance tax charges apply.
•Even if you gift your property to someone and move out, there are guidelines about how long you can stay for visits and social calls. Contact the inheritance tax hotline to get the specifics.
•If you want or need to live in the home and still want to gift the property, you’ll have to pay normal market pricing for your accommodations to the person you gifted the property to.
•Selling your home and moving in with an heir may cause income tax to be charged if you aren’t paying the fair market value for your accommodations.
•Sharing property, such as joint ownership in the case of allowing heirs to move in with you and gifting over the property, can reduce the amount of inheritance tax that will be assessed.
As you can see there are some pretty strict regulations regarding this activity and this list is not comprehensive. Contact the inheritance tax hotline with any questions.
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