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Inheritance tax on shared ownership of property in uk

Inheritance tax on shared ownership of property in uk

Old Aug 16th 2021, 12:35 pm
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Default Inheritance tax on shared ownership of property in uk

Hi, My father recently died and left his half share of the property he owns with my mother, to my brother, niece and myself. My share is 1/8th, equating to £18,000 of the property, which my mothers still lives in and has the benefit of for her lifetime. With regards to inheritance tax in Spain, do I have to declare this as I don’t really have anything tangible. Also if I do have to declare it how much tax will I have to pay and what paperwork will I need. I am not an executor of the Will and therefore have no paperwork. Any advice welcome.

Kind regards. LVC

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Old Aug 16th 2021, 1:02 pm
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Default Re: Inheritance tax on shared ownership of property in uk

It depends where you live as allowances vary by region. Even then you will get the standard allowance of about €16k and the value of your share will be reduced as the property has a usufruct (like a sitting tenant).

It's very unlikely that you will pay anything, but it will need to be declared within 6 months of the death, a gestor should be able to sort out the paperwork and submission etc at a reasonable cost.
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Old Aug 16th 2021, 1:10 pm
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Default Re: Inheritance tax on shared ownership of property in uk

Thanks for the reply. Much appreciated.
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Old Aug 16th 2021, 1:43 pm
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Default Re: Inheritance tax on shared ownership of property in uk

Originally Posted by LVC
Hi, My father recently died and left his half share of the property he owns with my mother, to my brother, niece and myself. My share is 1/8th, equating to £18,000 of the property, which my mothers still lives in and has the benefit of for her lifetime. With regards to inheritance tax in Spain, do I have to declare this as I don’t really have anything tangible. Also if I do have to declare it how much tax will I have to pay and what paperwork will I need. I am not an executor of the Will and therefore have no paperwork. Any advice welcome.

Kind regards. LVC
Are you getting a payout or is the 1/8th share just there until your mother dies?

If you are not getting any financial benefit then there should be no tax to pay.
And as long as this is the only property you own (even a share of) in the Uk you don't even have to declare it as its below the €50,000 required for the 720.

Here in the Valencian region inheritance tax is on everything after the first €100,000 I asked recently because I have my dads half of his house to inherit.
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Old Aug 16th 2021, 1:48 pm
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Default Re: Inheritance tax on shared ownership of property in uk

No I won’t get a payout of the inheritance until my mother dies , which I hope is not for a long time.
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Old Aug 16th 2021, 2:16 pm
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Default Re: Inheritance tax on shared ownership of property in uk

Originally Posted by LVC
No I won’t get a payout of the inheritance until my mother dies , which I hope is not for a long time.
I own a property in Spain which is the one I live in, but the only property I own in the uk is the share of 1/8th that my mother lives in.
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Old Aug 16th 2021, 2:49 pm
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Default Re: Inheritance tax on shared ownership of property in uk

The form 720 asset declaration is completely irrelevant to this thread. Even if you cannot sell or use the property because your mother will be living there you are still liable for IHT. The value for IHT purposes will be reduced accordingly based on the age of your mother.
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Old Aug 16th 2021, 3:50 pm
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Default Re: Inheritance tax on shared ownership of property in uk

Originally Posted by Fred James
The form 720 asset declaration is completely irrelevant to this thread. Even if you cannot sell or use the property because your mother will be living there you are still liable for IHT. The value for IHT purposes will be reduced accordingly based on the age of your mother.
Why do you say that Fred? If they have been gifted something worth over 50k, surely it needs declaring via modelo 720 (at the appropriate time).

It may not be the purpose of this thread but then what thread ever stays on track.
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Old Aug 16th 2021, 4:00 pm
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Default Re: Inheritance tax on shared ownership of property in uk

Until we know the value of the property, after deductions for the usufruct, it is not yet of any importance. If we do not keep the trhread on topic it will just go off on another thread about asset declaration.
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Old Aug 16th 2021, 4:20 pm
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Default Re: Inheritance tax on shared ownership of property in uk

Originally Posted by Fred James
The form 720 asset declaration is completely irrelevant to this thread. Even if you cannot sell or use the property because your mother will be living there you are still liable for IHT. The value for IHT purposes will be reduced accordingly based on the age of your mother.
As the Op has stated that there is no cash, they wont be liable for anything until it is liquidated.

I had this same question with the Spanish tax man already as my fathers house was originally in trust to me and my sister, so they wanted it declared.
We ended that and now I need do nothing until I inherit (then a 720 because my share will be over €50k) or get the cash (just pay tax on the amount above the IHT minimum).

I only made the 720 reference as none of us know just how much the 1/8th would be (house worth 10million maybe).
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Old Aug 16th 2021, 5:08 pm
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Default Re: Inheritance tax on shared ownership of property in uk

Originally Posted by Barriej
none of us know just how much the 1/8th would be (house worth 10million maybe).
I thought the OP had explained that as they said:-

"My share is 1/8th, equating to £18,000 of the property"
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Old Aug 16th 2021, 5:16 pm
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Default Re: Inheritance tax on shared ownership of property in uk

Yes my share is worth about £18,000 on a property worth £135,000 which will not be sold until the death of my mother. There is no other monies as this all went to my mother. I do nit get any financial benefits at this present time, only the knowledge of ownership.
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Old Aug 16th 2021, 5:31 pm
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Default Re: Inheritance tax on shared ownership of property in uk

A house or share in a house has to be declared for IHT in Spain. You cannot sell it until any IHT has been paid. Even though the house has a usufruct your share can be sold.
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Old Aug 16th 2021, 5:36 pm
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Default Re: Inheritance tax on shared ownership of property in uk

Thanks Fred, I am making an appointment to see a professional with regard to declaring the inheritance before I get myself into trouble. Thanks again for your help. 👍🏻
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