I need some help regarding the GROB rules.
A client (82) purchased a property with her daughter in December 2024 50/50 TIC. The client purchased with her daughter because there is an age condition of 55 and the daughter is currently 53. The client is listed as an ‘occupier’ with the management company to satisfy the age condition but does not live there.
The client’s financial advisor has suggested she gifts the majority of her beneficial interest in this property (but retaining 1% for the age condition) to her daughter for IHT mitigation with the final 1% being gifted when the daughter is 55 or the daughter will purchase this 1%.
As the client is documented as an ‘occupier’ with the management company, could this gift become subject to the GROB rules?
I have copied below below the legislation as confirmed by HMRC’s manual for ease:
The legislation provides that where an individual (IHTM14312) disposes of any property by way of gift on or after 18 March 1986 a reservation of benefit will arise under FA86/S102(2) where either
- the donee does not assume bona fide possession and enjoyment of the property at or before the beginning of the relevant period, FA86/S102(1)(a),
or - at any time during the relevant period the gifted property is not enjoyed to the entire exclusion, or virtually to the entire exclusion, of the donor and of any benefit to him by contract or otherwise, FA86/S102(1)(b).
Thanks for your assistance.