BTLs & Inheritance Tax…
Discussion
Apologies if this has been asked before, but what’s the best way of getting past inheritance tax on a couple of BTL properties? Would adding the child’s name to the property work if the rental income was still going solely to the parents joint account? Would the rental income need to be split accordingly too?
If anyone knows please do share on here or DM me.
Thanks
If anyone knows please do share on here or DM me.
Thanks
Dav_s said:
Apologies if this has been asked before, but what’s the best way of getting past inheritance tax on a couple of BTL properties? Would adding the child’s name to the property work if the rental income was still going solely to the parents joint account? Would the rental income need to be split accordingly too?
If anyone knows please do share on here or DM me.
Thanks
Anything that would work is pretty complicated and expensive, and only really worth it if the estate is substantial.If anyone knows please do share on here or DM me.
Thanks
In this instance you'd have to gift the properties without any reservation and live 7 years.
"Adding a name" achieves nothing in itself.
At the very least you'd need to be able to prove a gift took place and that after the gift any income arising from the property was shared accordingly. Since your tenant won't want to make two rent payments to two different people you'll probably need a proper Deed of Gift and then have detailed accounts/ bank records to show that income and liabilities were genuinely shared.
The Reservation of Benefit point made above is that you can't sidestep the taxman by pretending to give something away but behaving as if you've kept it. So if you gave your own home to the kids you'd need to pay them a market rent if you carry on living in it.
At the very least you'd need to be able to prove a gift took place and that after the gift any income arising from the property was shared accordingly. Since your tenant won't want to make two rent payments to two different people you'll probably need a proper Deed of Gift and then have detailed accounts/ bank records to show that income and liabilities were genuinely shared.
The Reservation of Benefit point made above is that you can't sidestep the taxman by pretending to give something away but behaving as if you've kept it. So if you gave your own home to the kids you'd need to pay them a market rent if you carry on living in it.
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