How to purchase the properties?

[Mr P]

Hi all

My relatives (husband and wife) entered into an Estate Protection Scheme via a Double Trust Scheme a few years ago as IHT planning with regard to their main residence.

Now, there are looking to buy two properties, one each for their two sons; both of these properties will be rented out until they move out of the "parental" home mentioned above.

In respect of financing the purchases, they have been unable to obtain a mortgage in the names of the sons only whilst acting as guarantors. They were told that they too would have to apply for the mortgage.

In doing that, will the new properties form part of their estates?

If they were to take out a loan and then loan the money to their sons (all to be documented), would this be IHT efficient?

What if they purchased the properties through their trading company, of which their sons also are shareholders. Would there be BPR on death transfers if the company stopped its trading activity and solely engaged in letting put the properties?

Thanks very much.

Mr P