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A client is proposing to transfer a large residential property to his son. The client will continue to live at the property and pay a rent. This should avoid an inheritance tax charge
At a recent meeting our client advised us that he is proposing to give away his large valuable house to his son. He then proposes to pay an arm’s-length rent to the son and live in the property for seven years in the hope of achieving a significant inheritance tax saving.
An added dimension to this scenario is that our client’s son will also live in the same house as his main residence.
The son does not have another residence but he does rent a flat for part of the week in London where he works. Our client’s son therefore hopes that the growth on the value of the house from the date of gift to him until its eventual sale will not be liable to capital gains tax.
Will this plan work or are there any aspects that we have overlooked?
Query 18 345...
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