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Gifting the home: A ‘successful’ gift?

Shared from Tax Insider: Gifting the home: A ‘successful’ gift?
By Mark McLaughlin, January 2024

Mark McLaughlin looks at the inheritance tax consequences of gifting the family home to adult offspring. 

It is not uncommon for an elderly parent (usually widowed) to make a lifetime gift of their home to adult offspring. This may be done for non-tax reasons (e.g., in the hope of sheltering against future care home costs; specialist advice would be needed on this point), or to reduce exposure to inheritance tax (IHT) on their death estate. 

Passing it on  

In the latter case, the parent will be hoping to survive at least seven years from making the gift, so that the gift becomes an exempt transfer for IHT purposes. Circumstances vary, but typical situations include where the parent: 

(a) gifts an interest in the home (e.g., an equal share) to the adult child, who co-occupies with the parent;  

(b) gifts their home to the adult child, who co

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