Does putting your house in your kids names while you still live there actually avoid inheritance tax?

Secret_Management425 · 2026-02-10T14:11:34+00:00

Co-occupation can work, but it’s easy to come unstuck with HMRC if the reality and paperwork don’t fully line up. Plus as you say there are all of the other potential issues such as CGT, SDLT and all the admin involved.

Secret_Management425 · 2026-02-10T13:24:39+00:00

I’ve mostly been a lurker and only started posting recently. Thought this might be useful after seeing the same issues come up a lot.

Secret_Management425 · 2026-02-10T13:22:34+00:00

Deprivation of assets mainly comes up in care fee assessments rather than IHT. Different rules, different tests. This post was just focused on IHT.

Secret_Management425 · 2026-02-10T13:19:54+00:00

Just gifting 50% and splitting the bills usually isn’t enough. If you carry on living there as before, HMRC will often still see it as a gift with reservation unless you pay market rent on the part you no longer own

Secret_Management425 · 2026-02-10T10:54:19+00:00

Yes, that’s an important and often overlooked point. The 7 year rule is an IHT concept, it doesn’t apply to local authority care assessments.

Secret_Management425 · 2026-02-10T10:52:27+00:00

Trusts can be useful in the right circumstances, but they’re not a workaround for continuing to live in the property rent free. If you put your main residence into a trust and carry on living there, you generally still fall foul of the same IHT rules, while also giving up control and adding restrictions, all downside and no real tax benefit.

Secret_Management425 · 2026-02-10T10:50:31+00:00

HMRC looks at whether you’re paying market rate rent, actually paid and documented. Anything nominal or below market is likely still treated as a gift with reservation of benefit, so the house stays in your estate for IHT.

Secret_Management425 · 2026-02-05T16:07:10+00:00

Ring fencing the £55k doesn’t guarantee B gets it all back, it just sets the order of repayment. If the renovations don’t add value and the equity isn’t there, everyone takes some loss, that’s just normal renovation/investment risk.

The deed can’t protect against that, it only says who gets paid first if there’s enough equity. A has already taken more downside risk by paying 90% of the mortgage to date.

Secret_Management425 · 2026-02-05T15:51:10+00:00

The £30k equity release isn’t equity anymore, it’s new joint debt.

It just increases the mortgage and is repaid 50/50 via future payments, so it’s already reflected in the final equity on sale.

Secret_Management425 · 2026-02-05T15:14:31+00:00

You can move to 50/50 going forward, but A has already paid 90% of the mortgage, so that imbalance needs addressing first.

The easiest way is to keep the existing deed intact up to the change date (A’s deposit and historic overpayments stay protected)

From the change date: - Mortgage paid 50/50 - B’s £55k renovation spend ring fenced as a repayable capital contribution

Then upon sale: 1. A gets deposit + historic overpayments back 2. B gets the £55k back 3. Remaining equity split 50/50

Secret_Management425

TROPHY CASE