Purchasing a Property for my Son

[scraggy55]

Is there any problem connected to buying a property FOR my son? I have an offer on my property, and have a small mortgage to clear. I want to buy a property in my Son's name, but I will be living in it. Will I incur any penalties from anywhere by doing this? I know about the seven year rule attached to such things, but is this ok to do legally? Who would I be answerable to, if I am? Just general comments, info, advice, etc. would be very helpful, thanks.

[buildersmate]

Maybe you don't know about the 7 year rule regarding gifts, because this would be treated as a 'gift with reservations' by HMRC for tax purposes. So if you are trying to minimise IHT in the future on your estate, it may not work.
It has reservations because you are living in it. You would have to pay rent to your son at commercial rates to avoid this.

[scraggy55]

I do know about the seven year rule. Apparently if its under 250,000 there is no gift tax. If that is the case, does anyone know where I stand?

[buildersmate]

"Apparently if its under 250,000 there is no gift tax."
Not true. I don't know this figure came from though it smells like one of the threshold figures at which Stamp Duty Land tax becomes payable. (SDLT is nothing at all to do with Gifts in relation to Inheritance Tax).
HMRC would add the value of the property back into your estate on death to enhance the overall value. The new overall value of the estate would then determine whether IHT was due (i.e. above the nil rate band, below which IHT isn't payable anyway).
You really need (paid for) advice from a tax accountant before embarking on this route.

[LoftyLottie]

Just to back up Buildersmate's reply (he is extremely knowledgeable) - You really do need to have advice from an accountant. You will have to pay, but I can assure you that a registered accountant is very worth while. I have just saved myself a huge capital gains tax bill which well justifies what the accountant has cost me.