Pass my property to my adult children in a trust or as a gift?

Keep_pedalling

Fi1964 said:

sheramber said:

Are you meaning leaving it to them in your will?

or gifting it before you doe?

Gifting before I die.

That would be an extreamly stupid thing to do. You have to consider what would happen to you should either of then go bankrupt, get divorced or die before you. If does not help with either IHT (gift with reservation of benefit) or care costs (deliberate deprivation of assets), and will like lead to your children having a CGT liability when the house is eventually sold. 

In addition if either of them don't currently own their own house they will lose their first time buyer status and will face an additional 3% SDLT on any purchase they home they buy. 

stuhse

My dad looked into handing his house to my sister and I many years ago to avoid inheritance tax..he would stay living in it.  His solicitor advised him that if I or my sister got married and then subsequently divorced he could end up chucked out of the house as part of a divorce settlement.    We never did it.

Keep_pedalling

stuhse said:

My dad looked into handing his house to my sister and I many years ago to avoid inheritance tax..he would stay living in it.  His solicitor advised him that if I or my sister got married and then subsequently divorced he could end up chucked out of the house as part of a divorce settlement.    We never did it.

He would also have had to pay you full market rent to avoid it beinging treated as a gift with resivation of benefit and therefore not subject to the 7 year rule.

Malthusian

Keep_pedalling said:

He would also have had to pay you full market rent to avoid it beinging treated as a gift with resivation of benefit and therefore not subject to the 7 year rule.

Which would have been taxable in the hands of the children as rental income. If he had regular income in excess of expenditure which he could afford to use to pay rent on his own house, then he could give it to the children instead, and it would be immediately IHT-free under the "regular gifts out of income" exemption.