We have a scenario where father transferred the legal title of the family home to his 3 children in 1998, two lived with him until his death and one did not. Father paid majority of the living expenses. There was no agreement to pay a market rent. There is a significant IHT liability on the entire value of the property under the GWROB rules even after claiming NRB/TNRB, RNRB and TRNRB. This seems very unfortunate. A claim under S102B FA 1986 seems to be a non-starter as the transfer was before 9.3.1999 (unless perhaps it would be possible to rely on the Hansard Statement of Mr Peter Brooke QC, MP of 10.06.1986) and as no share was retained by the father. Has anyone had this scenario and had any success with HMRC? Is there any argument that in reality there was an arrangement whereby the father and two resident children had agreed to share the accommodation (no granny annex or separate living quarters) and he had only reserved a benefit in the one third of the child who moved out? Any experience and views much appreciated.
You refer to him giving the legal title. Is it that he gave beneficial ownership in the whole property, represented by a lesser interest to each of his children?
Yes - to confirm the father transferred the property from his sole name to the joint names of his 3 children as tenants in common in equal shares.
As no share was retained by father I believe it will be a gwrob in the whole property, and the non resident child will have a cgt liability on his share on sale.