Lamp
Gold Star Holder!!
- Joined
- Jan 16, 2005
- Messages
- 23,013
If my Dad makes a gift to me of his house, and survives 7 years, there's no IHT due provided he doesn't obtain a "benefit" from the house (eg by living in it).
If he gifts the house to me, and I allow him to continue living in it, provided he pays me a market rent, and he lives 7 years, there's no IHT to pay.
Now...
I don't want him to be out of pocket, so, I make a gift to him each month for whatever the market rent is. I'm assuming he'll have to declare that as income for Income Tax purposes?
He then pays me the market rent - again, I assume I have to declare this as official income?
Net result: No liability to IHT, both our accounts are balanced, and the only liability would be 2 sets of income tax ? Gotta be cheaper than a whacking great demand for 40% over the £325,000 hasn't it?
If he gifts the house to me, and I allow him to continue living in it, provided he pays me a market rent, and he lives 7 years, there's no IHT to pay.
Now...
I don't want him to be out of pocket, so, I make a gift to him each month for whatever the market rent is. I'm assuming he'll have to declare that as income for Income Tax purposes?
He then pays me the market rent - again, I assume I have to declare this as official income?
Net result: No liability to IHT, both our accounts are balanced, and the only liability would be 2 sets of income tax ? Gotta be cheaper than a whacking great demand for 40% over the £325,000 hasn't it?