If you are thinking of making a substantial gift to save tax or to avoid care home charges make sure you seek professional legal advice to avoid any unforeseen traps.

Home owners often think that transferring the family home to others, such as children, will absolve all involved of inheritance tax liabilities and put the home out of the reach of a local authority. This is rarely the case.

Transferring the legal ownership of your home to your children, whilst you still live in it but they do not, may ease the estate administration on death but will usually make no difference to your inheritance tax liability due to anti-avoidance provisions.

Similarly, gifting the home in this way could also fall foul of care charge anti-avoidance laws where a local authority can still include a former house in means-testing calculations when making an assessment.

Other types of substantial gifts, such as business interests, might attract tax reliefs. It might also be possible to transfer assets into some form of trust or to consider creating a lasting power of attorney if the burden of dealing with a particular asset is getting too much.

If you require any further advice or assistance please contact Poh Shan Chong or a member of the Wills, Probate, Tax and Trusts team at Wortley Byers on 01277 268347 or pchong@wortleybyers.co.uk.

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