I have an estate where mother gave 95% of her house to her son who moved in and lived with her for the next 3 years before mother then left to move into a nursing home where she then died 2 years later. Mother continued to pay all running costs, even after she moved out. Son paid nothing in the whole period. I cannot find the authority for an oft quoted statement “there is no longer a requirement to share running costs as long as the [mother] does not receive any benefit from the [son]”. Here son paid absolutely nothing. Is this 95% gift caught by reservation of benefit rules? Thanks
mother appears to have received no benefit so hopefully hmrc will agree it is not a GWROB, although it will be a failed PET. From the point of view of the residence NRB, a GWROB
may be better, depending on the figures.
Have a look at s102B(4)
JWPCREERS LLP – York and Selby
The rule is that the son should not pay more than a proportionate share of the running costs (in this case, 95%). Otherwise the argument goes that the donor has a received a benefit in consequence of the gift. If the donor pays all the running costs then that will not cause a GROB, but I might query whether doing so is itself a transfer of value because it relieves the son from contributing.
There is a possible issue with transferring a 95%, rather than a 50%, share; HMRC in their manuals allude to this, with a rather ominous direction that this sort of arrangement should be referred onwards for technical guidance. I am not aware of HMRC disputing the position, but perhaps others on this forum have some experience of this happening?