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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
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Experience:  International tax
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My father and mother want to pass the deeds of a house into

Resolved Question:

My father and mother want to pass the deeds of a house into my name while they are still alive so to avoid inheritance tax.
I think it would be better for them to add my name to the deeds as joint owner. Will this be better
Submitted: 1 year ago.
Category: Tax
Expert:  TaxRobin replied 1 year ago.
HelloIf they merely add you as a joint owner the gift may not be excluded from their estate. A gift which is an exempt transfer may be chargeable under the Gifts With Reservations (GWR) rules, as may a gift which is an exempt transfer.The situation is straightforward where the donor makes a simple gift of all their interest in property they own. If your parents add your name to the deed but you do not use the property personally then the IHT would be effected by the GWR rules.GWR rules are fictitious treatments created only for the purposes of preventing IHT avoidance. Without the GWR provisions they could simply transfer property out of their estate, but continue to derive a benefit by remaining in occupation and the property would not be an asset of their estate at the date of their passing.For IHT the joint may not be the best.
Customer: replied 1 year ago.
What are the GWR provisions ?
Can you give an example of a GWP provision
Expert:  TaxRobin replied 1 year ago.
The GWR means the gift (for IHT only not for the actual real legal transfer) did not really happen.The function of the special rules is to ensure that tax is charged if on the transferor’s death there is property subject to a reservation, that property is treated as part of the death estate , orif within seven years before the death of the transferor the property ceased to be subject to a reservation, the transferor is treated as having made a PET at that time.ExampleMahinder gives her house to her son, Kamal but continues to live there until she dies, 3 years later. The gift itself is a PET that is chargeable following the death and Mahinder has continued to benefit from the property given away. A charge arises as both a PET and a GWR. The double charges regulations will apply and allow one of the charges to stand whilst reducing the other to nil.
Customer: replied 1 year ago.
My parents don't live in this house . It's an investment
Expert:  TaxRobin replied 1 year ago.
Then they would want to pass it to you totally or their portion would remain in their estate.
Expert:  TaxRobin replied 1 year ago.
If my answer addressed your question please rate below or above (let me know if you have difficulty as I believe the system changed).
Expert:  TaxRobin replied 1 year ago.
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