Goldfinger

Can anybody please shed some light re Peppercorn leases ..

My parents property was transferred into my names several years ago on a 40 year Peppercorn lease ( they are both in their early 60s ). My old man is getting a little twitchy about taxes and the like ....

My questions are ...

1. Will my parents, or myself, have any tax implications in the coming years whilst they are still alive ?
2. It is fine for my father to keep paying the council tax, buildings insurance etc in his name whilst they still live at the property ?
3. When my folks are not around whenever that may be in the future, what are the CGT implications for me when I come to sell the property ?
4. Will this qualify as part of my inheritence tax quota or not ?
5. Are the Government planning on enforcing a 'stealth tax' which may hit my parents and myself at some point in the near or not too distant future?

Any help would be much appreciated. If there are any pertinent questions / issues I have missed out please let me know. I look fwd to getting some sound advice.

Thanks in advance for any help given.

Cheers,
Goldfinger

Tiggs

why did they do that?

why give up their primary residence? i assume for IHT?

If the revenue investigate on your parents death they may well conclude that the transfer to you was one with retained benifit...the low rent. If they feel its a gift with reservation then they'll include it in their estate to calc the IHT due.

If IHT is their main concern there is a whole lot of stuff i would advise before anyone gives up their house! (even to their lovely kids!)

T

Goldfinger

Tiggs,

Thanks for your reply, it was a gift ... being a Peppercorn lease it has no monetary value to me whilst they are still alive, hence the 40 years term of the lease. Due to the nature of the lease they do not pay anything to me ... although I cannot chuck them out for any reason whilst they still want to live there ....

So, I think it may come under IHT when they are no longer around ( ? ) ...

Cheers

fast bloke

This will probably be considered a gift with reservation so it does nothing to lessen your IHT responsibility.
Answers to Q1 is probably not if ground rent is nominal.
2. Yes - no reason not to but this is partly what makes it a gift with reservation
3. If you own another property you will be liable for CGT on one of them should you sell
4. - See above
5. - probably, but no-one knows about it yet

Talk to an IHT planner - They will interrogate you for a couple of hours and will then be able to give you accurate answers

fast bloke

Yes - on this basis it doesn't really serve any purpose

Goldfinger

Fast Bloke and Tiggs ... many thanks for your responses, much appreciated

Cheers
Goldfinger

Tiggs

"Talk to an IHT planner - They will interrogate you for a couple of hours and will then be able to give you accurate answers"

i like to use the term "charm, in a professional manner" as opposed to interrogate!