Simply giving away assets, or a family home to children or other beneficiaries, is often quoted as being an ideal solution. It isn’t. Control of the assets given or gifted away is lost. Gifting a property and continuing to live in it, is not a “true gift” in law unless a full market rent is paid. If giving the family home it would no longer be classed as a primary residential residence and therefore from the date of the gift, any increase in value if the property was sold would create a chargeable gain on which Capital Gains Tax would be levied.

Importantly If a child was to later experience personal issues, became involved in divorce or bankruptcy, the house would be classed as one of their assets. It could therefore be claimed in any legal proceedings. If a child died in whatever circumstances the house would form part of their estate and go to their beneficiaries. Furthermore, in the event of family difficulties and a subsequent breakdown of the relationship between parent and child, the ability to remain in the house would be prejudiced. Income Tax on the rental value of the house would also be payable every year. 

We provide a specific solution that passes assets into a Family Trust whilst allowing you to retain full control. Detailed information is available within our Exclusive Estate Planning Brochure.

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