Is there a type of tenancy Where a property can be owned jointly in equal shares, but can not be sold or gifted by any party with out the consent of all.
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Who is this for please? i.e. what are the circumstances as to why you want to achieve this?
I just have to move my car quickly. I will be 2-3 mins if you can bear with me?
Sorry I'm back.
Who is this for please? i.e. what are the circumstances as to why you want to achieve this briefly?
The possible division of the family home, in an attempt to mitigate future estate duties.
Thanks. How much roughly is the property worth?
Thanks. There is such an arrangement whereby you can gift part of the property subject to a life interest trust but this would not be helpful because a life interest trust aggregates to your estae for IHT purposes. Accordingly you would need to look at a gift of part of the property subject to a right of occupancy for you and if applicable your spouse.
So if we gift this part of the home to our 2 children, Can one of them just sell their share off without consent from us or us and their sibling?
The downside with this is it is not as flexible as a life interest trust in that your rights are more limited particulalry if your trustees were difficult. For this reason you may wish to consider professional trustees if you are actively considering this option.
If we were to employ professional trustees, would this then be subject to IHT?
They could sell their share but consider that their share would be subject to your right of occupation so it is questionable whether anyone would want to buy it. If someone did they would still be subject to your right of occupation.
The real issue is not so much this it is if you decided you wanted to downsize. With just a right of occupation, you would not be able to force this issue without the risk that you would lose the share you have gifted to your children. Of course if they agree this is not so much an issue but you do potentially leave yourself slightly vunerable to your childrens desires and wishes.
The appointment of professional trustees does not mean that IHT is incurred.
OK we understand this, but if one of the children went bankrupt could this be ceased by the creditors?
Yes it could. It is difficult to protect against IHT when the asset is your property. You also need to consider the downsides of transferring away art of the value of your home. On the one hand you may save some IHT. On the other you can find that that share becomes liable to CGT. It is trues that CGT is less than IHT but given the above downsides coupled with this, it is often questionable whether seeking to try to transfer part of your principle home is sensible.
If you have other assets - e.g. surplus cash and other house this can be put inot pilot trusts which is very effective but the main home itself is often left well alone.
Sorry seized. Thank you Joshua, you have been a great help.
LL.B (Hons), Prof Dip Law & Practice. 9 years experience in private practice in England
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