Whose property?

My client Mr A is non-domiciled and not resident in the UK and is currently divorcing his English wife. They have lived abroad throughout their married life. Part of the divorce agreement is that he will provide a house (approximate value £800 000) in the UK for her use until her death with the capital either going back to himself or if he predeceases her to their daughter also not resident and non-domiciled.

If he buys the property he will have a UK situs asset subject to inheritance tax. To circumvent this problem it has been suggested that he make a loan to the wife to enable her to purchase the property on the understanding she will bequeath it to him in her will. However the concern is over the inheritance tax implications of this arrangement.

If he loans to and predeceases her does...