GWR - property gifting
sch0501
Member
Hi all,
Interested to hear your thoughts on this.
We've got a couple who are looking at ways to reduce their IHT bill.
One thing they've asked about (presumably been told elsewhere) is whether they could gift 25% of the property to each of their two children, retaining 50% in their names. Both children, as I understand, still live at home as their main residence. They would not be paying rent, although I believe they would be contributing to the living costs.
I've looked at the GAAR guidance and couldn't see anything, and HMRC have very helpfully now closed their community forum 
.
My immediate thoughts are that it would be GWR if they are not paying market rent but also I can't quite reconcile this with the fact that they would technically still own half the property.
Comments
If the children are living there as main residence and contributing to running costs then this works, no need for rent and no GWR issues. Standard 7 year gift rules apply.
However, for this to be effective long term, the children need to retain this as their main residence until after the parents die.