Because the owner has not omitted to exercise a right within s3(3) IHTA 1984. If he were to charge rent and not collect it that would be caught, though the value transfered might have to reflect the tenant’s set-offs or insolvency or other recoverability factor.
The absence of rent will be reflected in the value transferred and the greater diminution of the grantor’s estate when the right ot licence to occupy was originally granted (the disposition).
So there may well have been a transfer of value but when the disposition was made. The same principle applies to interest-free loans but there is no diminution with a demand loan. Consequently the legal ability of the grantors to turf out the son will reflect into the diminution and so the value transferred by the original disposition.
It also may be a GROB though at least that will avoid a Pre-Owned asset liability.
Jack Harper