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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15940
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Can my father gift his house to me, then continue to live there

Resolved Question:

Can my father gift his house to me, then continue to live there whilst paying me rent (market rent as confirmed by a RICs surveyor), and thus avoid IHT on the house assuming he survives 7 years?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. Yes, he can. You seem to have done your homework. The rent needs to be at the open market rate and you have had a RICS surveyor confirm that so I would expect that to be good enough for HMRC, though it is possible that they will ask the District Valuer to look at. You will need to dislcose the rent to HMRC in a self-assesment tax return unless the annual net profit is less than £2,500 and the gross rents are less than £10,000 and you have a source of income subject to PAYE, ie a salary or a pension, and it is large enough to absorb the tax on the rents. If it were me, I'd register for self-assessment. I hope this helps but let me know if you have any further questions.
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