Readers’ forum: Tax effects of moving in with the in-laws

13 January 2025

Issue: 4968 / Categories: Forum & Feedback , Income Tax , Inheritance Tax

Wishes fulfilled

An elderly client is in a situation where her late husband set up matters with regards to their joint estate so that she is able to do pretty much what she wishes during her lifetime but on death is tied into a will that is not exactly where her current wishes would have her find herself.

Three years ago she decided that she would like to favour her daughter and provide her with a potential future income. She paid £80 000 to convert the daughter’s garage into an annex suitable for letting via Airbnb. All planning consents were obtained. However the garage was actually solely owned by her son-in-law as the marital home had only been acquired in his name. The annex has been kitted out for letting purposes but never actually let. The daughter occasionally uses it as a space for crafts.

My client is now...

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