Can I gift my house to my two children (15 and 17 years old) to reduce inheritance tax (IHT), and is there then a period I must survive for? 

Arthur Weller replies: 

Yes, you can give (transfer) your UK home to your children while you are alive to potentially reduce IHT on your estate, provided: (a) you make no further use of the property (or pay them a full market rent); and (b) you survive the gift by seven years. The value of the house then falls out of your estate for IHT purposes. Because your children are both under 18, the legal title would have to be held for them by adult trustees until they reach majority. However, for IHT purposes, the transfer is still treated as a gift to the two individual children. If you continue to live there rent-free, the ‘gifts with reservation’ rules would effectively cancel the planning, and a pre-owned assets tax (POAT) charge could bite even if you avoid IHT. Professional advice would be advisable in advance of any transfer.