GIFTING PROPERTY: Risk Losing your Home

So many people think that gifting property to their children is wise. Yet, don’t stop to consider the implications of such gifts. Gifting is a great way to reduce your estate for Inheritance Tax purposes. However, there could be Inheritance Tax consequences which alone could be grave. But, you also have to face the reality that one day your off spring may throw you out.

Firstly, to briefly touch up on Gifts with Reservation of Benefit. If you gift a property but continue to live there rent free, then you have retained a benefit in it. HM Revenue and Customs deem this as a Gift with Reservation of Benefit. Consequently, it will still form part of your estate for Inheritance Tax purposes and may be subject to Inheritance Tax. So there is not IHT benefit at all. We covered this topic in a previous blog and you can read about it in detail by clicking here.

However, the other scenario most of us don’t consider, is the possibility that one day our offspring may kick us out of the house. They legally own the house and could do, if they particularly wanted to. Whilst we sincerely hope this does not happen to you, we are aware of many instances where this has happened.

There was an interesting article in the paper recently about an elderly couple in their 80’s that have been turned out of their home.

For free initial advice and guidance call our Inheritance Tax Planning experts on 01702 552 008 or contact us online and request a call


Manny and Brigitta’s Story

This is a brief summary of what happened to Manny and Brigitta, now 87 and 82.  Manny had a successful property business of buying and refurbishing properties. They decided to set up a trust fund for their two children, Maxine and Gerald, in the 1970’s. This was to secure a future for their children but also to reduce their Inheritance Tax liability. As the business became more successful the trust fund also grew. It eventually had a value of about £600million.

In 1992 Manny and Brigitta purchased Lyegrove in Gloucestershire as a place for the family. The house was put into the children’s name. They never thought that the children would one day force them out of it, but unfortunately that is exactly what happened. By late 2010, Manny had sold his interest in the business for £270million, of which £165million was put into the trust fund. Brigitta says that is when she started to notice a change in Gerald’s behaviour.

In February 2011, Maxine threw a party for Manny’s 80th birthday. It was at this party that Gerald in his speech to the guests said ‘Maxine and I would be happy to welcome our parents back to Lyegrove next year.’ And that was it, the start of a court battle which ended with Manny and Brigitta losing their home, because they made mistake of putting it in their children’s names. They are still well off but in the course of the dispute, they have lost their home and their much loved family. The one thing money cannot buy.

Click here to read the full article.

For free initial advice and guidance call our Inheritance Tax Planning experts on 01702 552 008 or contact us online and request a call



We all want to secure a future for our children and ensure that they are provided for. And, at the same, ensure that we pay the least amount of Inheritance Tax as possible. There is nothing wrong with that at all. However, great care should be taken when setting up trusts and gifting assets, especially when gifting property. You don’t want to end up in a situation like Manny and Brigitta where they have not only lost valuable possessions but their beloved family too.

Always speak to a professional, like Clarence Trustees, when considering setting up trusts or gifting assets.


Find out more about our Inheritance Tax Planning Service.

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