IHT 7-Year Rule Property Split

jackdoor

edit......

Musicman

jackdoor wrote:

Hopefully someone can give me a quick reply on this one.

I've moved back in with my recently widowed Mum (she solely owns the house outright) and we share all of the bills & running costs and it's the main residence for both of us. As her estate is above the current threshold she's starting to think about IHT planning. One thought she had was to gift half the house to me (only on paper as far as I'm concerned of course - any future care etc. comes before anything).

From research I've worked out this is a PET but from what date does the 7-year rule start and do we need to do anything official re. the house ownership?? Can she just hand-write a letter stating that from a certain date she's given me half the house we share? Perhaps this isn't sufficient and we have to lodge the new ownership arrangements with the Land Registry?

If the latter, do we have to use a solicitor or is it a fairly simple matter of filling in one of the many forms you can download these days? If you have any idea which one it would be appreciated.

I would be careful here, as the HM Customs, could look at this as a deliberate IHT evasion ploy, as your mother still has an interest in possession of the house.

I was left half a house by my late mother, but still ended up paying IHT, as they decided that my father when he died, had interest in possession, though I did not live in the house for the last 9 years of his life.

I would seek proffessional advice.

exil

This would be regarded as a gift with reservation - that is a gift that isn't a gift at all.

I think a PET can be set up but it would involve charging the parent rent AFAIK. The bottom line is - if you had to sell the house eg to pay debts or buy another house somewhere else what would happen to the parent? If the answer is "nothing" then it isn't a gift.