GWROB second home

Gift by children of 4/5 of second home to children in 1992. Parents and children both use it but parents pay no rent. Is there a GWROB? It would rely on the Hansard statement, which seems to require all to pay their share of the outgoings-but this has I believe been challenged. The parents paid all the outgoings. What is the experience of others as to hmrc’s attitude. The manual says such gifts, pre 31.3.99 are to be referred to technical.

Simon Northcott

I assume the gift of a 4/5 share was from the parents.

The Hansard statement is an odd one making unusual factual and legal assumptions. There was correspondence between the Law Society and the Revenue in 1987 (May 18) on the subject which aimed to clarify some of the issues.

The thing that might be a problem for your client is that the Hansard statement assumes that the arrangement is acceptable if it is in relation to the family home (and yours is not the family home – I see it is a second home).

Jill MacMahon
Solicitor and Director of Knowledge Management
for and on behalf of
Thackray Williams LLP

One might hope this situation to be within S.102B(4) FA 1986, which requires that the donor and the donee [both] occupy the land. That is more naturally seen where the property is the main residence of both, and assumes occupation to be more or less simultaneous. I assume that will not be the case with a holiday home, if such it is. The argument must nevertheless be that occupation is in fact shared by the donors with the donees; and the donors certainly receive no benefit if they meet at least 20% of the running costs. To be more precise, I assume that each parent (if they owned the property 50/40) will have given a 40% interest to their children; and each parent must be meeting at least 10% of the running costs.

Ray Magill