Gift your house and stay put - not likely!

Gifting your houseIf your estate is above the inheritance tax threshold, it can seem a good idea to gift away your house to your children now. As long as you survive 7 years from the date you give it, it’s theirs, right? Not exactly. There are a few things you need to bear in mind. First, you will have to pay them a full market rent to live there or it stays inyour estate as a ‘gift with reservation’ – and your children will pay tax on that rent. As it becomes their property, if they become bankrupt, or divorce, it may be sold from under you. And, as a second home, they will be subject to capital gains tax on the price rise when they do sell anyway. Take advice to find a better way.

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