How to 'share' fairly?

[aalindo]

Morning all,

According to the HMRC website, "if you give half of your home to your children, they move in with you and you share bills jointly, the half that you give them won't be treated as part of your estate for Inheritance Tax..."

Are the 'bills' simply the unavoidable household expenses such gas/water/elec/council tax etc. or should optional extras such as phone/TV/internet/general upkeep etc. be included as well in order to make a more solid case to the HMRC that the person making the gift has indeed payed their own way?

Thanks in advance.

[pqtaxation]

The requirement is that the person making the gift (giftor) should not receive/retain a continuing benefit from having done so. HMRC argue this would be the case if the children paid more than their (proportionate) share of household expenses after moving back in. The children potentially benefit from the future exemption of the gift from IHT as well as from PPR relief on any subsequent capital gain on future disposal.

So for those household costs that giftor would have paid for had children not moved back then giftor should their fair share. For phone/TV/internet/general upkeep etc you mentioned it is likely that giftor would have been paid for all of these if children had not moved back and so giftor should pay at least their proportionate share. But if, for example, children after moving in sign up for Sky TV which giftor would not have done and barely watches (so receives no benefit) then giftor does not have to pay a contribution towards that cost.

Incidentally, the HMRC website reads as though the maximum gift is 50% but that figure is not in the legislation to my knowledge.

[pqtaxation]

The requirement is that the person making the gift (giftor) should not receive/retain a continuing benefit from having done so. HMRC argue this would be the case if the children paid more than their (proportionate) share of household expenses after moving back in. The children potentially benefit from the future exemption of the gift from IHT as well as from PPR relief on any subsequent capital gain on future disposal.

So for those household costs that giftor would have paid for had children not moved back then giftor(s) should pay their fair share. For phone/TV/internet/general upkeep etc you mentioned it is likely that giftor(s) would have paid for these if children had not moved back and so giftor(s) should pay at least their proportionate share. But if, for example, child(ren) after moving in sign up for Sky TV in their name which giftor would not have done and barely watches (so receives no benefit) then giftor does not have to pay a contribution towards that cost.

Incidentally, the HMRC website reads as though the maximum gift is 50% but that figure is not in the legislation to my knowledge.

Some typos removed above from my first post .

[aalindo]

Many thanks for the prompt and detailed reply. Extremely useful.