I am an only child. My father died ten years ago and left me his half of the house, with the proviso that my mother could live there. Unfortunately, she has not lived in the house after his death, firstly living with me, then a wardened apartment and now needing 24/7 care back with me. My question is where do I stand when she passes? Do I have to pay full inheritance tax (IHT)? And as she has not lived in the house since my father passed away ten years ago, do I have any exemption from paying IHT under the seven-year rule? 

 

When your mother dies, you will simply inherit her half of the house. You are concerned about the gift with reservation rules, but they are not relevant here. If the value of half the house is less than the residence nil rate band, you will have no IHT to pay (I am assuming that there are no other assets to inherit).