How to start...?

[Keaton]

Hi everyone, 

 

So, as it stands I'm at the very beginning on my quest to build my dream house at the ripe old age of 26...! 

 

Essentially, I'm very fortunate enough to have the option of either purchasing some land from my grandmother or having her gift it to me and transferring the land into my name. Does, anyone have any experience with this process? 

 

I hope to establish if gifting me the land is better than buying it for a small amount, say £1,000? what would be the cheaper long term option do you think? (I don't particularly want to be liable for inheritance tax at a later date should anything happen if that makes sense?). 

 

Any help anyone can offer will be greatly appreciated!!! 

 

Many thanks, 

 

Keaton! 

[Russell griffiths]

Go and see a good accountant. 

[JFDIY]

As above, depends on value of her estate, any siblings that might contest things later on etc. I think they can chase you for 7 years after the gift at 40% of value on a sliding scale between years 3 and 7.

 

Personally I'd want to pay something even if not market value.

 

 

 

 

[Thedreamer]

1 hour ago, Keaton said:

Hi everyone, 

 

So, as it stands I'm at the very beginning on my quest to build my dream house at the ripe old age of 26...! 

 

Essentially, I'm very fortunate enough to have the option of either purchasing some land from my grandmother or having her gift it to me and transferring the land into my name. Does, anyone have any experience with this process? 

 

I hope to establish if gifting me the land is better than buying it for a small amount, say £1,000? what would be the cheaper long term option do you think? (I don't particularly want to be liable for inheritance tax at a later date should anything happen if that makes sense?). 

 

Any help anyone can offer will be greatly appreciated!!! 

 

Many thanks, 

 

Keaton! 

 

Inheritance tax is difficult because you need to understand the whole of an individual's estate and the history of it. It's tricky to answer question on a forum, speak to a Chartered Accountant/tax adviser as it could be very straight forward to resolve.

 

I started where you are now at 22 and about 70% done on our self build, eleven years later (and I qualified as a Chartered Accountant during that time!) 

 

 

[ToughButterCup]

Take advice from a property qualified accountant. One with a keen eye for detail - and some emotional intelligence.

[MrSniff]

++ see an accountant: inheritance tax has quite a lot of nuance and looks not only at the estate on death, but also the value that has been removed from the estate over the previous 7 years, and can also interact with capital gains tax.

 

High level (and simplified), a sale at undervalue is still a gift for inheritance tax purposes: it is a potentially exempt transfer which means that if the donor lives a further 7 years the gift is not counted as part of the IHT calculation on death. However, if the donor dies within 7 years, inheritance tax is payable on the value of the estate plus the value of the land gifted (less the amount paid) over the threshold of £325,000. A sliding scale applies on the tax rate from 3 years to 7 years.