I am considering an arrangement between parents and a daughter who lived together in a property and co-owned it 1/3 each. The daughter has now moved abroad and gifted her share of the property back to her parents. I have pointed out the CGT implication of this gift. The parents are now intending on gifting a significant sum of money to their daughter out of savings so that she can purchase a property (the gifted property has not been sold). Initially I had in mind that this might be caught by the POAT rules or some form of GROB but I am now not convinced that it would be. Does anybody have any ideas or suggestions whether such an arrangement would be caught or would be a straightforward PET of cash from the parents given that the funds for the gift are completely separate to the property?
I think the answer must depend on whether the two transactions are linked in any way.
If completely independent of each other, then I would view it as 2 PETS. However, if the daughter had, say, only gifted her share of the property back on the understanding that her parents would fund the purchase of her new home, then I believe the associated transactions provisions would apply.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals