My understanding of IHT
- If your parents jointly own a house, they
each have an IHT threshold of £325k plus £150k. The latter figure should eventually increase to £175k....hence
a possible £1m allowance (£950k at the moment).
- So, Parent 1 (on death) can use their £475k and gift that to you - this might comprise their share of the house or other things (such as money)..
- Parent 2 (on death) can
also use their £475k.
- If Parent 1 died after Oct 2007 and didn't use their full IHT allowance, then the unused percentage can be passed onto Parent 2.
So, when Parent 1 dies, you receive half the house in your name, and this would be reflected in the paperwork at Land Registry.
(It might be worth spending £100 and getting a definitive guide from a solicitor - professional advice)
From the definitive guide - .GOV website.
https://www.gov.uk/inheritance-tax/passing-on-homeYou can pass a home to your husband, wife or civil partner when you die. There’s no Inheritance Tax to pay if you do this.
If you leave the home to another person in your will, it counts towards the value of the estate.
If you own your home (or a share in it) your tax-free threshold can increase to £475,000 if:
- you leave it to your children (including adopted, foster or stepchildren) or grandchildren
- your estate is worth less than £2 million