git part of the house

[hotpoint]

Hello, if the property is worth 600k, and (600-263(nil band)) is gifted between 3 children ie 112.3k each, all this with the single parent occuplying the same house (ie owning 263k), would the gifts be PET and comply with the 7 year rule

[Miss Zippy]

This kind of scenario doesn't work for IHT mitigation purposes. Where the donor of the gifted property remains living in the property, it is what's know as a 'gift with reservation of benefit' (known at the GROB rules) and does not 'escape' the tax man's clutches on the donor's death. Someone else asked a similar question on here recently and my advice to you is the same as them - you must seek professional legal and taxation advice. The government has toughened up on IHT avoidance in recent years; but there do of course remain loopholes.

[hotpoint]

Thank you Miss Zippy, but the question asked before was for the whole house, I am talking about gifting part of the house. In real life if you sold the house and took half the money and bought a house somewhere else, that would escape IHT, so this method must work. Remember the key point here is PART of the HOUSE will be gifted not all. So technically she will be living in the house along with one of the sieblings. Any advice ? Thank you and best regards, Mr H

[darth vader]

gifting the house (or part of it) has been discussed before on AB, along with possible ways round it, though ultimately the best advice is to see an accountant. Meanwhile check here for options http://www.theanswerbank.co.uk/DisplayAnswers.go?q
uestion_id=31416&category_id=18&index=1

[hotpoint]

Thanks Vader, But that link doesnt explain at all anything to do with gifting part of the house whilst the giftee still has it as there main residence, see what you must do is change the deeds to tenants in common, then it is free of IHT but not CGT should the value gain in years to come. However the rest of the house, as long as less than the nil band rate will be IHT free to as long as it is in the will. H