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Problem with GWR or not

drtimbo
Posts: 2
Joined: Thu Aug 10, 2017 7:53 pm

Problem with GWR or not

Postby drtimbo » Thu Aug 10, 2017 8:30 pm

My late in-laws owned several properties, including their own home. In 1987 mother-in-law gave her 4 children a rented flat, and they continued to rent this property out. In 1999, father-in-law died: Mother-in-law initially wished to stay in her own home, but suffered health problems so that in late 2000 the 4 children offered her the opportunity to move into the flat she had given them 13 years earlier, so that she could manage more easily. It was agreed that she would pay council tax, the maintenance charge and all expenses, but they would not charge her rent. In following years the children would frequently take it in turns to stay with her overnight, as well as during the day, to provide care as necessary. In April 2017 this became too much, and she moved into a care home where she died in late May.
The solicitor dealing with probate insists that this represents a 'Gift with reservation of benefit' although the 4 children had run the flat as an investment property for 13 years, and no 'reservation' was intended - it was simply that, in caring for their ailing mother, this arrangement made most sense, but there was no pre-plan that she should move there.
The solicitor is stating that although the flat does not form a part of the Estate, it must be declared at current value for IHT purposes.
I should greatly value all opinions and guidance regarding this situation.

maths
Posts: 6803
Joined: Wed Aug 06, 2008 3:25 pm

Re: Problem with GWR or not

Postby maths » Thu Aug 10, 2017 10:15 pm

You may be able to argue the so-called change if circumstances let-out.

I.e. The gift with reservation provisions do not apply.

AGoodman
Posts: 137
Joined: Fri May 16, 2014 3:47 pm

Re: Problem with GWR or not

Postby AGoodman » Fri Aug 11, 2017 3:21 pm

Specifically FA 1986 Sch 20 para 6(1)(b):


(b) in the case of property which is an interest in land, any occupation by the donor of the whole or any part of the land shall be disregarded if—
(i) it results from a change in the circumstances of the donor since the time of the gift, being a change which was unforeseen at that time and was not brought about by the donor to receive the benefit of this provision; and
(ii) it occurs at a time when the donor has become unable to maintain himself through old age, infirmity or otherwise; and
(iii) it represents a reasonable provision by the donee for the care and maintenance of the donor; and
(iv) the donee is a relative of the donor or his spouse [or civil partner]1

drtimbo
Posts: 2
Joined: Thu Aug 10, 2017 7:53 pm

Re: Problem with GWR or not

Postby drtimbo » Fri Aug 11, 2017 10:51 pm

Thank you - this may well be extremely helpful!


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