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bigduckontax, Accountant
Category: UK Tax
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Can my friend buy a house? The cost is 350,000 pounds?

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Hello
Can my friend buy a house for me? The cost is 350,000 pounds?
Submitted: 10 months ago.
Category: UK Tax
Expert:  bigduckontax replied 10 months ago.

Hello, I am Keith, one of he experts on Just Answer and pleased to be able to help you with your question.

Yes he can! If he gifts it to you it creates a Potentially Exempt Transfer (PET) in his Inheritance Tax (IGT) affairs. PETs run off over seven years at a taper and in the event of decease within this period are added back to the estate for IHT purposes. PETs are the first to suffer tax and if the estate is insufficient to met the liability it cascades down to the beneficiary for immediate payment. The classic defence against PETs is a reducing term life insurance policy.

I do hope that you find my reply of assistance.

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