Did I just make this up - gifting part of your home?
Discussion
I believe that it's possible to gift part of your primary residence and then live in the remaining part.
However, I can't find anything on the [Yank]innerned[/Yank] to verify this.
It may be a way to avoid IHT or even CGT liability when passing your home on to children.
Anyone know if it's a thing, or have I just invented it?
However, I can't find anything on the [Yank]innerned[/Yank] to verify this.
It may be a way to avoid IHT or even CGT liability when passing your home on to children.
Anyone know if it's a thing, or have I just invented it?
In theory possible but you need proper advice and stick rigidly to it.
My neighbour set a scheme up but was always someone who wanted something for nothing and thought upon her death HMRC would just rubber stamp it.
I know from one of her children that HMRC opened an enquiry weeks after they put in figures.
I don’t know the ins and outs but she thought she could live in the house and pay rent on paper but not bother to actually do it.
They retained a solicitor who retained a Barrister who gave them the bad news.
My neighbour set a scheme up but was always someone who wanted something for nothing and thought upon her death HMRC would just rubber stamp it.
I know from one of her children that HMRC opened an enquiry weeks after they put in figures.
I don’t know the ins and outs but she thought she could live in the house and pay rent on paper but not bother to actually do it.
They retained a solicitor who retained a Barrister who gave them the bad news.
It won't work - google 'gift with reservation of benefit' - basically if you carry on living there, it doesn't;t count as a gift.
There are other factors to consider when gifting your home to your kids - such as, what if they get married & divorced - their ex-partner now owns part of your home - or they lose the equivalent amount in a settlement....
There are other factors to consider when gifting your home to your kids - such as, what if they get married & divorced - their ex-partner now owns part of your home - or they lose the equivalent amount in a settlement....
Yes, if you pay market rate rent, subject to regular review - and the recipient of said gift declares the income then you will likely be OK.
However, they will no longer a first time buyer & subject to second home stamp duty and more complex mortgage applications on their own property purchases etc.
It's not impossible, but far from straight forward.
However, they will no longer a first time buyer & subject to second home stamp duty and more complex mortgage applications on their own property purchases etc.
It's not impossible, but far from straight forward.
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