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Where Taxpayers and Advisers Meet

Bought a house for my daughter

kanrent
Posts: 51
Joined: Tue Dec 16, 2014 8:20 am

Bought a house for my daughter

Postby kanrent » Wed May 15, 2019 6:20 pm

Hi 7 years ago I bought a house abroad for my daughter 100% in her name, she is a british citezen but non resident and not domicile in the uk
I have lived in the house with her for the last 7 years, when I die is the property still subject to IHT I also have property in England in my name

darthblingbling
Posts: 228
Joined: Wed Aug 02, 2017 9:09 pm

Re: Bought a house for my daughter

Postby darthblingbling » Wed May 15, 2019 10:44 pm

Are you UK domiciled?

kanrent
Posts: 51
Joined: Tue Dec 16, 2014 8:20 am

Re: Bought a house for my daughter

Postby kanrent » Thu May 16, 2019 4:41 am

Yes I'm UK domiciled

Jholm
Posts: 55
Joined: Mon Mar 11, 2019 4:22 pm

Re: Bought a house for my daughter

Postby Jholm » Thu May 16, 2019 8:07 am

Have you been paying rent at market value to her?
If not, either you have been paying income tax under the 'gifts with reservation of benefit' rules or the house is still in your death estate for IHT purposes.

kanrent
Posts: 51
Joined: Tue Dec 16, 2014 8:20 am

Re: Bought a house for my daughter

Postby kanrent » Thu May 16, 2019 12:35 pm

If I now move out and stay out for another 7 years and stay out until my death how does that affect my IHT

Jholm
Posts: 55
Joined: Mon Mar 11, 2019 4:22 pm

Re: Bought a house for my daughter

Postby Jholm » Thu May 16, 2019 3:05 pm

If you move out now, you are treated as making a PET (Potentially exempt transfer) equal to the value of the house at that date. The usual £3,000 annual exemptions are not available.

The 7 year window will then apply. Should you die in this period, the transfer will become chargeable and tax may be payable depending how much you have available in the way of nil rate bands, the value of the transfer and other such transfers. Taper relief will be available if you die within 3-7 years.


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