From: Ronald Raygun 
Subject: Re: inheritance tax
Newsgroups: uk.finance
Date: Mon, 09 Jul 2007 13:25:37 GMT
Bytes: 2941

 amit.chauhan@gmail.com wrote:

> The scenario is a bit complicated and is as follows:
> 
> -     My parents purchased our family home about 25 odd years ago and this
> was an interest only mortgage.
> 
> -     About eight years ago they decided to re mortgage and try for a
> repayment mortgage as they had paid years of interest and weren't any
> closer to owning their house.

I'd have thought they would have been a lot closer to owning their house,
since surely 17 years of inflation would have eroded the "real" value of
their original debt significantly.

> The problem was that because of their
> age at the time they could only afford an interest only mortgage or so
> they thought. The only way they could obtain a repayment mortgage was
> to include me as part of the mortgage policy. As I was still living at
> home and was contributing to upkeep of the family home, we decided to
> take out a three way mortgage with a 'joint tenancy' agreement.
> 
> -     About three years ago we paid the mortgage off, I paid about 90
> percent of the core amount and my parents paid about 10 percent.

Could you not therefore be deemed to have bought a share of the house,
equal to about 90% of the loan 8 years ago divided by the house value
3 years ago?

> -     Ten months ago I bought a flat and moved into it with my wife.
> 
> -     If something was to happen to one of my parents I plan to move back
> into the family home with the remaining member.
> 
> My parents are getting old and would like to ensure I inherit the
> family home without being hit with a massive tax bill.
> 
> How can I ensure that I don't end up in a capital gains/inheritance
> tax nightmare?

How much is the house worth?  What fraction of it do you already own?
Apart from the house, what is the value of the rest of your parents'
assets?