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We have a client who is in his mid-60s and who invests via commercial mortgages in ‘buy-to-let’ properties.
For inheritance tax purposes we wonder whether it is possible for him to give the relevant properties to his children as potentially exempt transfers (PETs) but to retain the borrowings on these properties.
His plan is that he would then service these borrowings from his other income.
The lenders would probably not permit it but we think that he could execute a deed transferring ownership to the children that need not involve the lenders.
The deed could for example recite that henceforward he holds the properties as bare trustee for his children.
Would this plan work for inheritance tax?
We are aware of the capital gains tax position but the buy-to-let properties are currently standing at no gain so we do not see this as an...
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