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Ask Clare Your Own Question
Clare, Solicitor
Category: Property Law
Satisfied Customers: 34890
Experience:  I have been a solicitor in High Street Practise since 1985 with a wide general experience.
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My mother has just given me the bulk of my inheritance in

Customer Question

My mother has just given me the bulk of my inheritance in advance. She has done this in the hope it will avoid inheritance tax but as it's very unlikely she will live another 7 years (she's 90 and very frail) I don't believe that it will make any difference.
However, it has made me think about what will happen to my estate when the time comes.
I am considering passing this money onto my 2 children (aged 30 & 35) as an advance on their inheritance from me.
If they then pooled their resources and purchased a flat (as joint tenants) but allowed me to live in it rent free - i presume that my death wouldn't make any difference to the title and hope that the value of the flat wouldn't impact the value of my estate.
All this assumes that i live another 7 years
So my questions are
If i survive another 7 years am i ok to give them money now and not have it included in the value of my estate on my death?
If they use the funds to buy a house and allow me to live in it, is that going to be ok with the tax man?
Or, if i give them the money now and then take a loan from each of them to buy myself a flat, will my estate be reduced by the total of the loan but increased by any improvement in the value of the flat?
I look forward to hearing from you with your guidance.
Submitted: 1 year ago.
Category: Property Law
Customer: replied 1 year ago.
I may have directed my question to the wrong segment of the law. Perhaps it should have been to family law or tax?
Expert:  Clare replied 1 year ago.

Thank you for your question

My name is ***** ***** I shall do my best to help you.

1. Yes if you survive 7 years then it will not form part of your Estate on your death

2. No i am afraid that if they use it to purchase a flat in which you live rent free then that will be seen as a"gift with reservation of benefit" and it will still form part of your estate.

3. Yes that could work

Please ask if you need further details