IHT Query Regarding Property 9 September 2022 at 1:09PM in Deaths, funerals & probate 14 replies 583 views

GDB2222

getmore4less said:

As the gifts are to residents there is no reservation of interest if the proportion of the property gifted is proportional to the occupation.

I did wonder about that, but what happens when they move out?

se_yp

Thank you all for the input. much appreciated.

GDB2222 said:

getmore4less said:

As the gifts are to residents there is no reservation of interest if the proportion of the property gifted is proportional to the occupation.

I did wonder about that, but what happens when they move out?

Precisely our thoughts. The gifts are being handed to the children who will continue to live there and assuming they are all contributing towards upkeep of the house and bills etc (perhaps splitting equally 3 ways) then I would have thought gift with reservation doesn't apply.

If the 2 children move out before the 7 years however that i understand brings about some complication. I should add that this is just the 1st step in the IHT planning process. The next step will likely be the "big one" where she decides whether to sell and downsize, convert the home into a HMO, take on a lodger or something of the sorts. 

theoretica

se_yp said:

Thank you all for the input. much appreciated.

GDB2222 said:

getmore4less said:

As the gifts are to residents there is no reservation of interest if the proportion of the property gifted is proportional to the occupation.

I did wonder about that, but what happens when they move out?

Precisely our thoughts. The gifts are being handed to the children who will continue to live there and assuming they are all contributing towards upkeep of the house and bills etc (perhaps splitting equally 3 ways) then I would have thought gift with reservation doesn't apply.

If the 2 children move out before the 7 years however that i understand brings about some complication. I should add that this is just the 1st step in the IHT planning process. The next step will likely be the "big one" where she decides whether to sell and downsize, convert the home into a HMO, take on a lodger or something of the sorts. 

If she - as only a 1/3 owner of the property - would still have the majority of decision making on whether to sell/HMO etc then that would be an argument that gift with reservation would apply.

se_yp

Once house is split (most likely equally), it would be joint decisions on everything related to it.