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Taxing issue over rent; property posers Your legal questions answered / RICHARD BATTRICK.

Q My mother transferred her house over to me, and I was wondering if I should be charging her rent? The house isn't above the inheritance tax threshold.

A If your mother's total estate (including the value of the house) is likely to exceed the inheritance tax threshold, then charging her a market rent may be an alternative to paying inheritance tax at 40% on any amount above the threshold. Otherwise the house will still be calculated among her assets on her death as she lives in it. If those assets are less than the IHT threshold you have nothing to worry about but if you don't live with your mother you may be liable for capital gains tax.
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Title Annotation:Features
Publication:South Wales Echo (Cardiff, Wales)
Date:Mar 14, 2013
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