Regular weekend trips to see family can nullify the benefits of gifting property wealth
Parents who gift their homes to dodge death duties risk tax bills just by visiting their grandchildren, experts have warned.
Some 20,000 more families risk being caught by inheritance tax as property prices rise but tax breaks remain frozen until 2028, prompting families to seek ways to sidestep the divisive duty. Gifted property becomes tax free after seven years, under current tax laws.
But while it is possible for homeowners to sign over their homes to reduce the size of their taxable estates, the gift will only be exempt from taxation if they vacate the property.
Even visiting the house for two weeks of the year in a row or on successive weekends can result in the tax planning technique backfiring, due to so-called “gift with reservation of benefit rules”, it has emerged.