The Lemon Fool

I am buying a house for my children , I want no income or anything it is a simple gift , no mortgage , no rent and so forth .

My only concern is I do not want it to fall into the hands of a third party , boyfriends etc , my thought is to set up a discretionary trust .

Is this the simplest route and if so can anyone suggest what the approx cost of such a trust would be in terms of solicitors fees .

Thanks.

Having spent the last few years as trustee for a trust for the children of a deceased friend, be very careful.

The taxation aspects are onerous, the law is complex and you may find the cost and complexity exceeds the benefit, I would take professional advice and consider whether you can get the same result by another means.

Thanks, for replies , have spoken to solicitors who would like 1250 plus vat for setting up , what made me smile was on the link for simply law there was an offer to download a document for 19.00 to create a trust .

on the taxation complexities I was hoping as there was no income involved there would be no problems other than as suggested in the link a IHT issue after ten years , although the solicitor suggested that if set up whilst alive then there would be no IHT .

Have you considered the alternative of making a gift but taking a charge (a mortgage) for the full value over the house? It could be interest free, to avoid any taxation issues, and you could release it - or part of it - whenever you liked.

This way you would effectively retain all the value in the house, so that even in the unlikely event of a third party making a claim on it there would be nothing worth having.

This would be much simpler - and therefore much cheaper - than setting up a trust.

Thanks, I am open to any ideas , I just wonder , given HMRCs new powers to approach avoidance in a different way, whether they would claim it's still part of our assets for IHT purposes .

Holts wrote:I just wonder , given HMRCs new powers to approach avoidance in a different way, whether they would claim it's still part of our assets for IHT purposes .

Yes, they would, in that the value of the `loan' to your children would be classed as an asset.

I hadn't realised from your original question that this was likely to be a concern for you, but as it clearly is the proposed solution may not be suitable.

Clitheroe , thanks for your help , my favourite when little , 2:30 sunday afternoon after the Navy lark .