What tax is due if my father places his house in a living trust with me as the beneficiary and then he dies? Is the house subject to inheritance tax (IHT), will I have to declare it as income from a trust on my income tax return, or is there something else? 

Arthur Weller replies  

If the transfer into the trust is within seven years of your father's death, the value of the house will be included in your father's estate when he dies. See HMRC’s Inheritance Tax Manual at IHTM14511 onwards. Where the trust is a discretionary trust, then if the house was worth more than £325,000 when transferred, the transfer would have triggered lifetime IHT at the time, and this lifetime IHT will be taken into account when calculating the IHT on the estate at death (NB. as a completely separate matter, any income you receive from the trust will have to be declared on your self-assessment return).