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04 August 2015
Will the building of a home for parents be treated as a return of earlier gifts?
Our client has received farmland and shares worth several hundred thousand pounds from his parents over a number of years. Most of the gifts were more than 10 years ago some were more recent. The parents live in a house that is worth about £2m but it is now too big for them. Our client has already paid about £500 000 to build an extension to it. The plan is for his parents to give the whole house to our client who would live in the main house and they would move into the annexe.
To avoid reservation of benefit one would normally expect the parents pay a market rent for their occupation of the annexe. Because our client has paid for the cost of building the annexe logically the parents should pay less perhaps just the rental...
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