Gift with reservation of benefit?

[Pentoe]

Hello,

My father is considering reducing his Inheritance Tax bill by giving me a flat that he owns as a Potentially Exempt Transfer. I would then use the rental income from this flat primarily to pay for my son's private education (which my father currently pays for directly himself).

I would like to know:
a) if there are any problems with the plan I have outlined above, and
b) would there be a problem if at some time in the future, perhaps when my son's schooling is complete, I were to use some of this rental income to pay for my father to go on holiday or even contribute towards any care home fees?

Thank you very much for your help. It is much appreciated.

[Lee Young]

Provided your father is not legally bound to pay for your son's education then I see no issues with this at all. The change of circumstances and therefore use of the money in the future should also present no problems provided it is is not a condition of the original gift.

[maths]

I'm not sure I am as confident as Lee.

The change of circumstances "let-out" relates only to a re-ocupation of the property (not envisaged here).

I think that the gift may well qualify as a GWR in the event the rental income is used to benefit the father (eg paying for holidays for him). Once property is gifted there is no time limit within which the donor has to benefit.