I included my children in the deed of my main house seven years ago. It is jointly held. I also moved out soon after, and so did my children. Hence the house was rented out since April 2016. My question is: do we all three have to split the rent and associated costs since 2016, so the children are exempt from inheritance tax (IHT)? Can I backdate the income and expenditure to them? I paid full tax on all income and expenses on that property. 

Arthur Weller replies:  

If you gave away all your house or part of your house to your children, but since the date of the gift you have received all the rental income from the house, this is a ‘gift with reservation’ for IHT purposes. That means that not only your portion of the house but also the portion of the house that belongs to your children will be included in your estate when you die. If you declared to HMRC all the rental income from the house as your income, I don't see how you can change things retrospectively by backdating the income and expenditure to your children.