This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Gift with reservation query - property ownership transfer wrt IHT

CG123
Posts:1
Joined:Wed Sep 01, 2021 9:46 am
Gift with reservation query - property ownership transfer wrt IHT

Postby CG123 » Wed Sep 01, 2021 9:51 am

Hi
I am trying to complete the IHT forms and have come across an unusual situation.
50% of a property was gifted in 2003 and changed on land registry to joint tenants. Both tenants still lived at the property and paid the bills equally.
Would this gift be included or excluded from IHT?

AGoodman
Posts:1286
Joined:Fri May 16, 2014 3:47 pm

Re: Gift with reservation query - property ownership transfer wrt IHT

Postby AGoodman » Thu Sep 02, 2021 1:03 pm

I'm assuming they were not married (as it would then be an exempt gift).

The gift is likely a reservation of benefit (therefore included in the estate).

It might have come under the exception for the gift of a share of property (s.102B(4) Finance Act 1986) but I believe it is generally accepted that this only applies to tenancies in common, not joint tenants, because only the former results in a gift of a share in the property.

maths
Posts:8284
Joined:Wed Aug 06, 2008 3:25 pm

Re: Gift with reservation query - property ownership transfer wrt IHT

Postby maths » Thu Sep 02, 2021 2:34 pm

There has in the past been significant discussion on the point raised by AG on this forum; without I believe any definitive conclusion!

FA 1986 s102B(1) clearly refers to a gift of "an undivided share of an interest in land"; it does not simply say "a share of an interest in land".

It would thus seem to be necessary for any gift to be of an undivided share. If X owned a property and and declared that henceforth he held the legal title for himself and Y as joint beneficial tenants this would not seem to satisfy s102B even though a gift of an interest in land had occurred but not a gift of an undivided share.

If A and B held land as joint beneficial tenants and A then severed his interest, henceforth A and B would hold as beneficial tenants in common even if 50/50. A or B could subsequently make gifts which would fall within s102B.


Return to “Inheritance Tax, IHT, Trusts & Estates, Capital Taxes”