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Where Taxpayers and Advisers Meet

How does HMRC prove GWROB?

Zurf
Posts:2
Joined:Mon Sep 27, 2021 11:27 pm
How does HMRC prove GWROB?

Postby Zurf » Mon Sep 27, 2021 11:40 pm

Hi all, I really hate to make this post. My Mother has gifted her house to her daughter who has moved in with her family to look after her. Since she is still receiving benefit by continuing to live there, gift with reservation of benefit would apply and the house would still form part of her estate. However she basically plans to lie about where she really lives. By changing her addresses everywhere (credit, dvla etc) to her sisters address and would claim to live there, when in reality she would continue on living at her current house. Of course I’ve tried to talk some sense into her but to no avail. Anyway, I’m worried that my sister will get in trouble after mothers death if they find out. Was just wondering how would HMRC go about finding out that my mother has been lying about her address to avoid GWROB?

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

Re: How does HMRC prove GWROB?

Postby AGoodman » Tue Sep 28, 2021 11:27 am

I don't know exactly how they would find out but the key point is that your mother's executors would be left with the problem and if they knowingly submitted an IHT account that was false they would be committing fraud. While that could result in hefty penalties, it could also result in a criminal conviction.

Rather frustratingly, unless your mother is extremely wealthy, she could have given your sister a half share (and possibly more) without it being a GROB. It might still be possible to unwind and do it properly.

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

Re: How does HMRC prove GWROB?

Postby AGoodman » Tue Sep 28, 2021 11:27 am

nb. even if your mother was wealthy, she could still have given a share of the house without it being a GROB.

Zurf
Posts:2
Joined:Mon Sep 27, 2021 11:27 pm

Re: How does HMRC prove GWROB?

Postby Zurf » Tue Sep 28, 2021 12:46 pm

I don't know exactly how they would find out but the key point is that your mother's executors would be left with the problem and if they knowingly submitted an IHT account that was false they would be committing fraud. While that could result in hefty penalties, it could also result in a criminal conviction.

Rather frustratingly, unless your mother is extremely wealthy, she could have given your sister a half share (and possibly more) without it being a GROB. It might still be possible to unwind and do it properly.
But she would then have to contribute 50% of the household bills no?

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

Re: How does HMRC prove GWROB?

Postby AGoodman » Thu Sep 30, 2021 12:19 pm

Yes, but that's not usually significant when compared to 40% inheritance tax.


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