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Legal News | 27.06.24

GROBs – unsuccessfully trying to avoid inheritance tax

We have many clients approach us to ask whether it is possible to reduce the value of their estate for inheritance tax purposes by gifting their house to their children, while continuing to live in it.

Such a gift will be considered a gift with a reservation of benefit (“GROB”) and could still form part of your estate upon your death for inheritance tax purposes.

This could mean that, even years down the line after legally transferring your property into your children’s name(s), the property could be considered a GROB and be taken into account when calculating inheritance tax.

If you wish to give your house to your children, but avoid the GROB rules, you would need to pay your children a fair market rent to live in the property. This would need to be properly calculated and regularly reviewed to ensure you continue to avoid the GROB rules.

Of course, a gift of your home involves far more consideration than just tax and paying rent.  We are experienced and able to talk you through the many issues that need to be considered.  Please do get in touch with our Private Client team if you wish to discuss gifting your property and the potential consequences of doing so.


Posted By Our Wills, Tax, Trusts & Probate Team