gifting part house

[rosecat]

We bought our son a house to live in ,in our names as joint tenants.We now wish to gift him a share perhaps one third .It is worth about£240k.A mortgage was raised for £40k on our house to part finance this purchase 6 years ago.He has paid us varying amounts of regular rent.Would a discretionary trust be a wise decision?There are 2 other children and this house represents just slightly more than one third of our total estate. IRT implications need to be considered.

[Simon Sweetman]

If you gift him a one-third share, you have disposed of 1/3 of the property and are deemed to have done so at market value. However there is a fair chance that offsetting two CGT annual exemptions might cover the capital gain. To work that out you need to know the original cost. You have not given the information that anyone would need to advise about IHT, except that some planning over the next few years would be sensible.

simon.sweetman@btinternet.com

[rosecat]

We paid 114k for this house six years ago.I read that spouses need to have equal amounts of capital when setting up a discretionary trust but I have a property which is my name only.Can this be excluded from a trust?Also we do not have equal savings.Our main home is as tenants in common.