This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

IHT

musty
Posts: 11
Joined: Wed Aug 06, 2008 4:00 pm

IHT

Postby musty » Thu Sep 20, 2018 6:23 pm

I wish to gift a buy to let property to my two daughters, both of whom are married, and hopefully in the future the gift will qualify as a successful PET.
Is there any way in which I can structure the gift to preclude the risk of a successful claim of a share of the property by the spouse of either daughter should they divorce.

AdamS93
Posts: 243
Joined: Tue Sep 26, 2017 6:28 pm

Re: IHT

Postby AdamS93 » Thu Sep 20, 2018 6:35 pm

Your question, isn't for an accountant unfortunately. You need to see a solicitor.

Off topic - IHT shouldn't be your main immediate concern. There will most probably be a immediate capital gains tax liability due on transfer.

maths
Posts: 7630
Joined: Wed Aug 06, 2008 3:25 pm

Re: IHT

Postby maths » Thu Sep 20, 2018 8:38 pm

Is there any way in which I can structure the gift to preclude the risk of a successful claim of a share of the property by the spouse of either daughter should they divorce.
I'm unaware of one.

I assume no mortgage.

You could, as presumably the legal owner, execute a declaration of trust in favour of two daughters 50/50. This trust would not be known to their spouses as such a declaration does not require to be filed anywhere; hence, not public knowledge.

If say one daughter intimated that she might be divorcing you could execute a new declaration cutting that daughter out of the trust.

If the property produces rental income this would require a tax return to be filed. To avoid the daughters having to file you could for example execute a Declaration, say, 49/49/2 with you owning the 2% and under the Declaration it is agreed that you are entitled to all the rental income and hence only you would need to file a tax return.

AGoodman
Posts: 909
Joined: Fri May 16, 2014 3:47 pm

Re: IHT

Postby AGoodman » Fri Sep 21, 2018 11:59 am

No, not really. Judges have wide discretions to vary trusts and other arrangements for a reason.

The fact it is a gift and jointly owned with sister would help on a divorce, as may (but less so) a co-ownership agreement that they will only sell with mutual consent.


Return to “Capital Gains Tax, CGT”