Thinking about gifting property to your children while you’re alive? It’s not as simple as signing over the deeds and waiting seven years. This week’s article unpacks the traps: how the seven-year rule and taper relief actually work, why continuing to live in a gifted property triggers “gift with reservation of benefit” rules that keep it in your estate regardless of how long you survive, and why capital gains tax on second homes or rental properties can be due immediately, even though inheritance tax might eventually be avoided. We also cover the limits of holdover relief, principal private residence relief, and the lesser-known pre-owned asset tax, which exists specifically to catch clever workarounds. Finally, we look at safer alternatives – trusts and life interest arrangements – that can achieve similar goals with fewer tax traps. Read the full article, or book a discovery call to talk through your own situation.
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Six short reads each week on tax, Wills, family wealth and running a business, from John Ireland. Since 1996, three decades of protecting families.