gifting part of my house to my children

[mario.sazio@hm-treasury.x.gsi.gov.uk]

I've been advised that I should add the mnames of my children to the deeds of my house as a way of avoiding Inheritance tax.

But would this mean they would pay Capital gains tax?

[Simon Sweetman]

I fear this was not good advice. No, they would not pay CGT, but you probably would, because you have made a disposal. This would also be wholly ineffective for Inheritance Tax because you would have "reserved a benefit" and the property would stay in your estate.

The real questions are (1) do you actually need to take measures for IHT planning, and (2) what are your circumstances so that someone could tell exactly what advice you need.

simon.sweetman@btinternet.com

[konya]

I would have thought your gift to the children would be free of CGT assuming it is your Principle Private Residence.

On any future sale of the property, the children may beliable to CGT on their share

For IHT, if you pay a market rent to the children, there should be no Reservation of benefit, so the gift would be outright. However, the children may be liable for income tax on the rent received.

Konya