Wealden Times | WT210 | August 2019 | Restoration & New Build supplement inside
Wealden Times - The lifestyle magazine for the Weald
Wealden Times - The lifestyle magazine for the Weald
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“Apart from the obvious risks of<br />
giving away your home, such as<br />
those you give it to getting divorced<br />
or becoming bankrupt, there are a<br />
number of other issues to consider.”<br />
any rise in value will be subject to Capital Gains Tax and it<br />
will be part of your estate for Inheritance Tax purposes.<br />
What are the potential repercussions of buying for a relative?<br />
If you buy a house which you then gift to a relative,<br />
you will no longer have any rights in relation to that<br />
property or any call on the funds used to purchase it.<br />
If you want to retain an interest in the property or the<br />
funds used to buy it, it’s important to take legal advice.<br />
Can I sign my current property over to a relative<br />
and what are the pros and cons of doing this?<br />
This is a common question when people are considering<br />
inheritance tax or the potential cost of residential care.<br />
Apart from the obvious risks of giving away your home,<br />
such as those you give it to getting divorced or becoming<br />
bankrupt, there are a number of other issues to consider.<br />
To be effective for IHT you would need to survive for<br />
seven years after gifting and pay the new owners a market<br />
rent to continue living in the property. When assessing<br />
the level of support for residential care, local authorities<br />
can look at past gifts and take a view on whether the<br />
person requiring funding ‘deliberately deprived themselves<br />
of capital’ in order to get a higher level of support.<br />
There is also the risk that should you wish to<br />
downsize in the future and the new owner agrees<br />
to sell, they will be subject to Capital Gains Tax on<br />
any rise in the value since the time of the gift.<br />
Can I buy a property to rent out to a family member?<br />
You can rent a property to family members. If you choose<br />
to rent at below market value to a ‘Connected person’<br />
such as a child or grandchild this will restrict the expenses<br />
you are able to offset against your income tax liability.<br />
Provided a rent is charged you can normally deduct<br />
the expenses up to the level of rent received, any excess<br />
expenses can’t be carried forward to use in a later year.<br />
Steven Aslett works closely with the Ashford, Tenterden &<br />
Whitfield offices of NFU providing specialist advice to their<br />
new and existing clients on investment, retirement planning,<br />
protection and Inheritance Tax mitigation.<br />
For more information, visit nfumutual.co.uk/ashford<br />
or call Ashford 01233 884829 / Tenterden<br />
01580 849353 / Whitfield 01304 899650.<br />
Spring Grove<br />
School<br />
‘A great place to<br />
grow’ for boys and<br />
girls aged 2 to 11<br />
Working with YOU, not just for YOU<br />
Learning<br />
through<br />
enjoyment<br />
• Tax planning<br />
• Profit improvement strategies<br />
• Business development advice<br />
• Inheritance tax advice<br />
• Succession planning<br />
• Payroll<br />
Get in touch now to arrange your free consultation<br />
www.mageegammon.com 01233 630000 mg@mageegammon.com<br />
131 wealdentimes.co.uk<br />
SpringGroveSchool<strong>WT210</strong>.indd 1 12/07/<strong>2019</strong> MageeGammonWT194.indd 15:53<br />
1 13/03/2018 12:30
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