IHT planning with own home - anyone come across this one before....?
Jona
Member
A potential client has called up with the intention of seeking IHT advice.
They have heard about a arrangement (scheme) whereby you sell 1% of your home to family member retaining the other 99%.
Upon death and in valuing the estate the value of the home is written down as it's hard to sell 99% of a property.......?
Not come across that one before, not something I would ever consider (POAT / DOTAS?) but has anyone seen this being promoted or know where more information can be found with a view to poo-pooing the idea??!?
They have heard about a arrangement (scheme) whereby you sell 1% of your home to family member retaining the other 99%.
Upon death and in valuing the estate the value of the home is written down as it's hard to sell 99% of a property.......?
Not come across that one before, not something I would ever consider (POAT / DOTAS?) but has anyone seen this being promoted or know where more information can be found with a view to poo-pooing the idea??!?
Comments
Alos, the anti-avoidance legislation would probably kick in on the basis of why would you actually sele just 1% of your property unless it was purely to gain a tax advantage? Unless, of course, your house is worth £30m in which case 1% is a reasonable amount of cash!!
I suspect it doesn't work if challenged by HMRC - either because it actually doesn't work in law, or because if challenged no one has sufficient resources to take on HMRC to a tax tribunal!
I would suggest that if you really want to know if this can work (or how else you might be able to plan with the main residence) speak to Peter Legg. Ex HMRC; regular speaker at STEP events and really does know his stuff.
Yep have had dealings with Peter before so if client really wants to risk it will suggest pulling him in - but it's a "no" from me!