Inheritance Tax Query.

chelseadog_2

My daughter sold her house in London four years ago and is now living with me in my rented accomodation. She will soon be buying a house of her own, for which she has the capital, and wants me to live in it with her. I am happy to do this, however, I was planning to give her a significant sum of money in the near future to reduce my inheritance tax liability. If I do this, could it be considered to be a "gift with reservation"?

Can anyone advise please?

Gold_Shogun

chelseadog wrote: »

She will soon be buying a house of her own, for which she has the capital, and wants me to live in it with her. I am happy to do this, however, I was planning to give her a significant sum of money in the near future to reduce my inheritance tax liability. If I do this, could it be considered to be a "gift with reservation"?

ONLY if the two "events" are "dependant or conditional" upon each other.

IF your gift was "conditional" upon your retaining a Legal Right to live in your daughter's house until your death, then the answer would be YES.

However, if your gift was "Free & Clear" of any such "related transaction", then the answer would be NO.

Hint (for a "totally hypothetical situation") ...
A) ... It is always possible that a loving daughter could TODAY promise (in writing) her "concerned-for-the-future" dear/dotty old Mum/Dad to always provide a roof over their heads without any financial strings whatsoever.

... A month or three later, a loving parent might possibly suddenly decide to unconditionally gift some money to a much loved daughter rather than make said daughter wait until the death of said parent.

C) ... This hypothetical situation is considerably strengthened if the daughter is in a position to complete on the purchase of her house BEFORE the parent makes the actual gift ... (which, purely coincidentally, seems to also be the position you describe).

:beer: