My client wants to gift their holiday home to their sons. All will continue to use the property, both together and separately.
They are happy to pay full market rent. However, will it be sufficient to pay rent only for the days they are in occupation or should they pay for the whole year, as they could in theory go there if they wanted?
Hello,
IHTM14333 suggests the gift is a GWROB regardless of the rent payment.
“a second home or holiday home which the donor and the donee both then use on an occasional basis”.
Its open to debate. The guidance is clear.
Richard C. Bishop
I was going to pithily write “See IHTM14341” but I wasn’t allowed to - posts must be of at least 20 characters, which this one now is.
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My apologies - this isn’t my area of practice and I was pointed in the wrong direction. Thank you for taking the time to respond.
S102 FA 1986 supplemented by Schedule 20 para 6(1)(a) applies - exclusion of benefit where full consideration paid. Problem will be ensuring record of how they can evidence that the payments for occupation are for full consideration (need professional advice as evidence in support) and keeping records. Of course, if they stop using the 2nd home at any point a GROB becomes a PET and survive 7 years the past will be ignored.
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I concur. Proper records of occupation and payment are essential, and the market rent needs to be the market rent, not mates rates.
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That confirms what I was told initially and where I had ended up also.
Thank you very both for responding. I am really grateful.