Gifiting Property

[alive555]

Can someone explain what are the benefits of gifting a 1m main residence on an estate which is valued at 2.6m (over the 2m threshold to benefit from the revised nil rate band increase)

Specifically whats the benefit per year assuming taper relief as follows

Gifts made 3 to 7 years before your death are taxed on a sliding scale known as ‘taper relief’.

Years between gift and death Tax paid
less than 3 40%
3 to 4 32%
4 to 5 24%
5 to 6 16%
6 to 7 8%
7 or more 0%

and of RNRB


The maximum available amount of the RNRB will increase yearly .

For deaths in the following tax years it will be:

£100,000 in 2017 to 2018
£125,000 in 2018 to 2019
£150,000 in 2019 to 2020
£175,000 in 2020 to 2021


q1 .
what would be the benefit please

q2.
if the beneficiary (son or daughter) moves to the property to take care of the parent does the parent need to pay a rent ? and would this gift qualify for taper relief after 3 years?

thanks

[AnthonyR]

Welcome back. Still not found anyone to help you with this?

If the parent remains in the property then there is no benefit unless they pay full market rent to the owner for the remainder of their occupation of the property. Which would of course be taxable on the owner as rental income. So the parent would need to pay circa £50,000 per annum across to the new owner for the rest of their life.

[alive555]

hi Anthony

Yes we have advisor !

They suggest potential saving of 52k per year and no rental payment if recipient is child who moves into house . Not sure if that is from year 3 onwards ? Hence why i put this on the forum.

Also appears there are no other ways to mitigate iht without significant disadvantages so it look like our tax bill will be close to 1m on 2.6m estate

I find it very hard to believe there are no way of reducing this legally. Very hard !

Anyway this will mean im not returning at all to ever live in the uk.