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Who cares?
Two years ago, our client (who is in her eighties, is registered blind and has also suffered a stroke) sold her home to an unconnected third party and moved in with her daughter and son-in-law, who effectively now care for her. (The daughter receives the carer's allowance in recognition of this.)
Who cares?
Two years ago, our client (who is in her eighties, is registered blind and has also suffered a stroke) sold her home to an unconnected third party and moved in with her daughter and son-in-law, who effectively now care for her. (The daughter receives the carer's allowance in recognition of this.)
The proceeds from the sale of the property were gifted to the daughter by way of a potentially exempt transfer and they have subsequently been used towards the purchase of a larger property, which is more suited for the whole family to live in. This new property is owned in the names of the daughter and son-in-law only.
It would seem to us that our client falls within the new 'pre-owned assets' régime by virtue of meeting the 'contribution condition' and will thus be required to pay the pre-owned assets tax (POT) charge, assuming that her share of the rental value exceeds the £5,000 de minimis limit.
Is our understanding of the position here correct or is there something that we have overlooked, which would then allow our client to escape the potential POT charge?
Also, assuming the charge applies, how is our client's share of the rental value calculated? Would it be one-third of the total rental value?
Readers' views would be welcomed.
(Query T16,521)
