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Best of both worlds?

Shared from Tax Insider: Best of both worlds?
By Mark McLaughlin, September 2021

Mark McLaughlin highlights an important exception to the inheritance tax ‘gifts with reservation’ anti-avoidance rules on the gift of an interest in a rental property.  

Owners of investment properties would sometimes like to gift an interest in a property (e.g. to adult children) but retain all the rental income. Their intention is generally to reduce the value of their estates for inheritance tax (IHT) purposes without affecting their standard of living. 

Do you have a reservation? 

The ‘gift with reservation’ (GWR) IHT anti-avoidance rules (FA 1986, ss 102-102C, Sch 20) are designed to prevent ‘cake and eat it’ situations whereby an individual makes a lifetime gift of an asset (which they hope to survive for at least seven years, so that the gift becomes an exempt transfer) but continues to have the use or

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