31st August 2017 at 8:42am
In the first of a new series, we ask Shona Lowe to answer some real-life financial dilemmas.
Shona heads up the team of tax, trust, probate and succession planning specialists at Standard Life’s financial planning arm, 1825. She is a solicitor with 13 years’ experience in private client work.
Question for Shona
In my late 50s, I have a daughter who is about to go to university away from home.
I’ve got money to invest and would like to use that to buy her a property to live in.
I’ve got an inheritance tax problem that I want to solve but my more immediate issue is with my daughter’s fiancé who I’m really not sure about.
I want to make sure the fiancé doesn’t have a claim on the property and that my family’s interests are protected.
What can I do?
There is a financial solution you can consider. You can put the money into a particular type of trust and the trustees can buy the flat. (I’ll be writing in more detail on the types of trust in MoneyPlus soon.)
Your daughter will have the right to live in the flat rent free but she can’t sell it. Only the trustees can do that. If she gets married, her husband has no control over it and if they split up, the value won’t have to be shared with him.
It also helps with your inheritance tax problem because after 7 years the amount you put in trust will be out of your estate.
We’d recommend anyone with an issue like this takes financial advice to suit their own circumstances, and there may be other options to consider.
The information in this blog or any response to comments should not be taken as financial advice and is based on our understanding in May 2017. Laws and tax rules may change in the future and tax treatment depends on your individual circumstances.