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TaxRobin
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Inheretance Tax planning- we ( my wife & Me ) want to give

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Inheretance Tax planning- we ( my wife & Me ) want to give a gift to my by son adding his name in our joint property to make him 1/3 owner for no money consideration. Can it be called a gift with no reservation ? and will it save us from inheritance Tax ?? My total estate ( property £ 550K plus £ 350k Other assets like cash at bank Etc ) I am 73 and my wife is71 and in good health ( mean quite likely to survive for another 8/9 years ) - By the way my son is not going to live with us on this property. I would grateful to you for your answer to my question please . Thank you
TaxRobin
Hello,
Generally, any gifts you make to individuals will be exempt from Inheritance Tax as long as you live for seven years after making the gift. These sorts of gifts are known as 'Potentially Exempt Transfers' (PETs).
In your situation though, you are giving an asset away , but are keeping an interest in it - you are giving your house away but continuing to live in it rent-free - this gift will not be a potentially exempt transfer.
The next problem is that you want to give a portion of your home to your son, if he moved in with you and you share bills jointly, the portion that you give him would not be treated as part of your estate for Inheritance Tax purposes as long as you live for seven years after making the gift.
I know I was not able to advise on any thing positive but I sincerely XXXXX XXXXX is helpful.
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Customer: replied 4 years ago.

What if my son agree to pay £ 120000 for his 1/3 share in my property ?? Will That solve my problem? I mean no Inheretance tax to pay ?
Then you would be selling and not gifting. You would have no capital gains tax either because it is your main home.
Selling is a better route.
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Customer: replied 4 years ago.

Hi Tax Robin


 


Thank you for your help I am satisfied with your answer


Many thanks again for your time and help Bhupen Mehta

You are most welcome.
Your positive rating is always thanks enough.
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