My wife and I sold our jointly owned house a year ago in order to downsize and, at the same time, to buy a small holiday house in France. We have been unable to find a suitable new main UK home, so for the time being, we have been renting for a year. Conversely, we have now possibly found a holiday house to buy abroad.
1. If we buy the French house first, from various relevant tax points of view, would this make it our main ‘first’ house, despite continuing to live predominantly in the UK (in rented accommodation until we find a new house to buy)?
2. If my wife and I were to buy the French house with our own joint funds, but with ownership registered in the joint names of my wife, myself and our two children, in equal shares of (say) 4 x £50,000 each (although this could be entirely flexible) = total cost of £200,000, presumably the children’s shares would be considered lifetime gifts subject to the tapering seven year potential liability for UK ITH in due course?
3. If indeed that is the case, does the seven years relate to both my wife’s and my own lifetimes, or simply to the first to die? – i.e., if one spouse lives for only four years (say) and the other for over seven years, would there be any potential IHT liability – subject of course to the total value of the assets of either spouse passing to the other in normal circumstances?
Thank you.
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