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Our client and her husband jointly own a freehold property which is currently let.
They propose to transfer the property into four names; i.e. husband wife and two sons the latter having a 99.5% interest and the parents having 0.5%. There is in existence a property investment company the issued share capital being divided as to parents 52% and the two sons 48%.
If the proposal is adopted we can see problems with capital gains tax stamp duty division of net rents arising on property and the implications of divorce insolvency and personal claims made against the two children.
Obviously the main purpose of the transfer of interests is to mitigate the parents’ potential inheritance tax liability.
If the children are to have a 99.5% interest in the property then we assume the net rental income will have to be divided accordingly....
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
