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Where Taxpayers and Advisers Meet

Property Ownership Transfer wrt IHT

Another1
Posts:9
Joined:Sun Apr 04, 2021 12:17 pm
Property Ownership Transfer wrt IHT

Postby Another1 » Fri Jul 09, 2021 12:00 pm

If I were to transfer part or whole ownership of a property to ANOTHER whilst I continue to live in the property ,and acknowledging that there would be a rental payment to be made by me to ANOTHER,would this transfer constitute a PET with its 7 year duration before becoming IHT exempt.

Does the fact that a rent is paid have any bearing on the transfer,or is it still regarded as a Gift for IHT purposes?

NB. I refer to ‘I’, but present ownership is Husband and Wife as T-in-C,and ‘ANOTHER’ would be two sons.

Jholm
Posts:219
Joined:Mon Mar 11, 2019 4:22 pm

Re: Property Ownership Transfer wrt IHT

Postby Jholm » Fri Jul 09, 2021 12:36 pm

Yes, still a PET. And possible CGT due, depending on the facts behind the transfer and who it is to.

If market value rent is NOT paid, then it could be considered a 'gift with reservation of benefit', which means that the property will still form part of your estate for IHT purposes.

Another1
Posts:9
Joined:Sun Apr 04, 2021 12:17 pm

Re: Property Ownership Transfer wrt IHT

Postby Another1 » Fri Jul 09, 2021 1:14 pm

Yes, still a PET. And possible CGT due, depending on the facts behind the transfer and who it is to.

If market value rent is NOT paid, then it could be considered a 'gift with reservation of benefit', which means that the property will still form part of your estate for IHT purposes.
Thank you,….you emphasise …..rent is NOT paid…..etc

If rent is paid,presumably first para still applies?

Jholm
Posts:219
Joined:Mon Mar 11, 2019 4:22 pm

Re: Property Ownership Transfer wrt IHT

Postby Jholm » Fri Jul 09, 2021 1:25 pm

Yes, because the value of your estate is instantly reduced by transferring the asset.

IHT is based around this concept, generally.


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