From: "tim" <520061495900.removethis@t-online.de>
Newsgroups: uk.finance
Subject: Re: Inheritance Tax Question
Date: Mon, 13 Oct 2003 23:39:42 +0200
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"Ronald Raygun"  wrote in message
news:0oEib.6032$rB2.53353649@news-text.cableinet.net...
> tim wrote:
>
> > And AIUI this method is the worst of both worlds.  Generally the property
> > doesn't become yours for IHT but does become yours for CGT.
>
> Eh?  Surely, for tax purposes, it either is or is not yours.  It can't
> be yours for the purpose of one tax and not for another.

Yes you're right.  I was getting confused with the care home rules.

OK I'll try again:

It doesn't work as a way of avoiding having to pay for the parent's
care if they have to go into a home,

but it saddles you with a CGT bill which will be (much) bigger than the
IHT bill that you have avoided.

Does that sound better?

tim



> IHT trumps
> CGT, so if IHT is payable, it means the gift is set aside and treated
> as if it had passed by inheritance, so the heir will only be liable for
> CGT on gains accruing from date of death, which would be the case anyway
> even if the house passed by will.
>