A friend of mine and his wife are looking to buy a Buy To Let flat (no mortgage). They are both nearly 70 years old. They may also move into this flat in the future if they can no longer look after the house that the currently live in (as they get older). My friend and his wife wish to use the income from this property to supplement their pension.
They have 2 children who both already own their own homes. Both these children have jobs and are either basic or higher rate tax payers.
Are there any tax benefits or downsides to owning the new Buy To Let flat as either tentants in common (25% each) or joint tenats with their 2 children?
In particular:
+ Would either of the children incur any kind of tax liability when they buy this new Buy To Let flat and adds his childrens names as either joint tenants or tenants in common? He would be paying for all of the stamp duty himself.
+ Assuming that their estate is worth more than the inheritance tax threshold, if the property was held as tenants in common at the time of purchase and then my friend dies then how much of the Buy To Let flat would be deemed as being taxable from an inheritance tax standpoint?
+ Does holding the property as joint tenats change things in the above scenario?
Generally, he is wanting to know if there is anything in particular that he should do when buying this Buy To Let flat which could be beneficial in the future.
Thanks!
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