iht avoidance

exeter444@hotmail.co · Postby **exeter444@hotmail.co** » Sun Apr 27, 2003 5:15 am

My parents have a residential property worth Â£400k. Can my dad gift half the property to his children on his death and thereby use up his nil rate band?
My mother could contine to live in the property until her death and then she can utilise her nil rate band. Because both nil rate bands have been used, but at different points in time, no iht will be payable. Is this tax strategy legal?

Thanks for any help,

John.

Anthony Nixon · Postby **Anthony Nixon** » Mon Apr 28, 2003 12:17 am

Yes this is a very common strategy and perfectly legal.

It does not necessarily produce the best capital gains tax result for the children, nor give the surviving spouse complete protection. More sophisticated trusts in the will can deal with this and I would be happy to let you have more details.

Anthony Nixon ATII
Associate Solicitor
Lester Aldridge Solicitors
Russell House
Oxford Road
BOURNEMOUTH BH8 8EX

Direct Line: + 44 (0)1202 786236
E-mail: anthony.nixon@LA-Law.com
Website: http://www.lesteraldridge.com

Stewart · Postby **Stewart** » Thu May 01, 2003 1:45 pm

..but I thought this form of gifting would be classed as 'a gift with reservation'
as the widow retains the benefit of the whole property.

Anthony Nixon · Postby **Anthony Nixon** » Tue May 06, 2003 12:30 am

It's not a gift with reservation because it is the husband who has made the gift and he has died.

Care has to be taken that the wife does not have an interest in possession, which would be treated as equivalent to ownership for inheritance tax, but there are various ways of achieving this.

Anthony Nixon ATII
Lester Aldridge Solicitors