Gifting proportions of proerty to chilren

simon2018

Mojisola wrote: »

The seven year rule wouldn't apply if the parents continued to live in the family home.

Thanks. But where does it say that? I've looked adt dor Gov sites. CGT/etc but nothing like that is mentioned. The friends main home where their daughter lives will get 50% of the home - so imo, 0nly 50% of the home will attract the CGT

Linton

simon2018 wrote: »

Thanks. But where does it say that? I've looked adt dor Gov sites. CGT/etc but nothing like that is mentioned. The friends main home where their daughter lives will get 50% of the home - so imo, 0nly 50% of the home will attract the CGT

Look under "gifts with reservation". This is where someone makes a gift of assets but continues to enjoy some of the benefits of owning them. HMRC can regard it as not being a genuine gift for IHT purposes. This can be avoided by the person concerned paying rent.

00ec25

simon2018 wrote: »

Thanks. But where does it say that? I've looked adt dor Gov sites. CGT/etc but nothing like that is mentioned.

because it is nothing to do with CGT, go read the relevant tax page and then you'll find it, as we have already mentioned in this thread CGT is not the only tax you need to consider

Skibunny40

As I read the OP, the first proposal is to give 50% of the residential home to an adult child who lives there - in that case, there is no "gift with reservation" because the gifter isn't benefiting from the 50% they gave away, only the 50% they already own.

getmore4less

Skibunny40 wrote: »

As I read the OP, the first proposal is to give 50% of the residential home to an adult child who lives there - in that case, there is no "gift with reservation" because the gifter isn't benefiting from the 50% they gave away, only the 50% they already own.

the issue is there are two parents and potentially only one person getting the gift, that might make a 50% gift a partial GWR.

(there may be an example in the HMRC manual as this must be a common combination)

xylophone

https://www.gov.uk/inheritance-tax/passing-on-home

You don't have to pay rent to the new owners if both the following apply:

you only give away part of your property
the new owners also live at the property

The expectation would be that donor and donee would pay their shares of bills etc.


https://freemanharris.co.uk/tax-implications-inheriting-gifting-property/

Many clients wish to gift their home in order to protect the local authority from forcibly selling their property in order to pay for care home fees. If you are going or plan to go into residential care, then the local authority will check whether there has been a deliberate deprivation of assets. The local authority can carry out a financial assessment to determine the amount of funding you are entitled to and it takes into consideration not only your currently owned property but also previously owned assets as well. This means that any gifted property can also be included in their calculations.

xylophone

The seven year rule wouldn't apply if the parents continued to live in the family home.

Not so - see links above.

If you die within 7 years
If you die within 7 years of giving away all or part of your property, your home will be treated as a gift and the 7 year rule applies.