Letting family live in second home rent free gift tax

letting family live in second home rent free gift tax

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Sell My House or Keep It As A Rental?
In the UK, allowing family members to live in a second home rent-free can have potential implications for gift tax, inheritance tax (IHT). Yes, unless you are giving them money or vice versa their is no tax implication. You're just being generous. The only time something like this. The gift would be a potentially exempt transfer (PET) and would fall out of charge if you survive for at least seven years from the date of the gift.
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Comment on: Letting family live in second home rent free gift tax
  • letting family live in second home rent free gift tax
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    calendar_month 25.02.2024
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    calendar_month 26.02.2024
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    account_circle Duzilkree
    calendar_month 26.02.2024
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However, on the flip side, the donee will need to declare the rental income and pay tax on it. If you enjoyed this post, then why not read our next post on buy to let costs or the news on the budget tax rise targeting landlords? Then, the difference between FMV and actual rent received or mortgage paid in this case , that would be a gift back to them. Potentially Exempt Transfers PETs When you give a gift, it is typically treated as a potentially exempt transfer PET for inheritance tax purposes, meaning that it will only attract inheritance tax if you pass away within seven years of making the gift.