Gift of property

My client wishes to make a gift of an investment property to his son. This will give rise to a capital gains tax charge but the inheritance tax implications are of more concern.

The son will occupy the property with his girlfriend and my client is worried as to what will happen if there is a breakdown in their relationship. (The relationship between the son and the girlfriend not between the father and his son.)

The father is therefore considering taking out a charge on the property. To my mind this would constitute a reservation of benefit and the gift therefore would not then be a potentially exempt transfer.

Is it possible to word the charge in such a way as to avoid this problem? Any ideas as to other solutions would be welcome.

Query 17 659 – Nahla

Reply from Taxplanet

It appears that the client is...