Seven years’ time

My client who is a UK resident and domiciled divorcee wants to purchase a residential property for the use of her children and grandchildren. My understanding is that this property will cost approximately £500 000.

As an added complication the client has now informed me that she does not want this newly purchased property to ever have to be sold or divided up in the event of any of her children getting divorced.

It would therefore seem that a trust would be the ideal vehicle for the ownership of this property.

However as the value of the property exceeds the nil-rate band for inheritance tax any transfer into trust would trigger an immediate tax charge.

We are considering whether or not we should advise our client to make a gift of £325 000 to set up a trust and then lend a further £175 000...