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Where Taxpayers and Advisers Meet

Benefit in Kind

kumar9
Posts:58
Joined:Wed Aug 06, 2008 4:00 pm
Benefit in Kind

Postby kumar9 » Wed Jun 20, 2018 4:56 pm

My son owns a property & he would like my wife & me to get ll the income from renting the property though he still wishes to own the property. He pays tax at a much higher rate than us.Can this be done ?
Thanks

AdamS93
Posts:268
Joined:Tue Sep 26, 2017 6:28 pm

Re: Benefit in Kind

Postby AdamS93 » Wed Jun 20, 2018 7:58 pm

The title to your post and your actual post have nothing in common.

It can be done yes, but it is definitely not as simple as just declaring the property income on your tax return though.

There will need to be an outright gift or a declaration of trust. Both of which will have massive IHT and CGT implications - you need to consider the whole picture.

If there is a mortgage on the property, the lender will probably not allow you to do this anyway.

kumar9
Posts:58
Joined:Wed Aug 06, 2008 4:00 pm

Re: Benefit in Kind

Postby kumar9 » Wed Jun 20, 2018 8:54 pm

Apologies for not correctly titling the question.
There is no mortgage.
Is your implication that if it is done via a life interest Trust ( ie he sets up a deed for my wife & myself to enjoy life time income from the property while he still retains ownership?/) , CGT & or IHT would not be applicable ??
Thanks
Kumar

AdamS93
Posts:268
Joined:Tue Sep 26, 2017 6:28 pm

Re: Benefit in Kind

Postby AdamS93 » Thu Jun 21, 2018 7:50 am

Yes, IHT and CGT will be applicable. You will be changing the beneficial ownership.

The government don’t make it that easy to avoid tax, and understandably so.

kumar9
Posts:58
Joined:Wed Aug 06, 2008 4:00 pm

Re: Benefit in Kind

Postby kumar9 » Thu Jun 21, 2018 8:49 am

Thanks
I have no problem with paying tax due , I was mostly interested to know if he could own the flat but let us enjoy the income for life.that's all
Thanks
Kumar

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Benefit in Kind

Postby bd6759 » Fri Jun 22, 2018 5:01 pm

After he has received the income and paid tax on it, he is free to give it to you if he so wishes.


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