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Reduced plot

22 January 2013
Issue: 4387 / Categories: Forum & Feedback , Inheritance Tax
A sizeable home was originally situated in grounds slightly exceeding a hectare, but the owner gave the furthest distant part of the grounds to his children many years ago. The original owner still has access to, and some use of, that land and there is a risk that this may be a gift with reservation for inheritance tax purposes

Our client owns a sizeable home in grounds of less than half hectare in what originally were grounds slightly exceeding a hectare.

Due to advancing age he hived off the distant part of the grounds as a gift to his children more than 20 years ago.

The part given away is largely coppice and shrubbery but includes lawns and flowerbeds which were part of the original house grounds from which the gifted land is fenced off but with access from the donor’s reduced plot.

Evidently there is a risk that the gift of land might be regarded as still being in the donor’s estate by virtue of it being “enjoyed” through his ability to walk around the gifted grounds and exercise the dog etc.

He has thought that since he keeps the grounds in reasonable condition by for example paying for the removal of fallen trees...

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