Money Tax Smart

When is a Gift not a Gift?

If you give away an asset but still use or benefit from it, it stays in your estate for inheritance tax purposes. This applies to land and personal items.

Land

• Reserved Benefit: If you give away land but still use it without paying full rent, it stays in your estate.

• No Reserved Benefit: If you stop using the land or pay full rent, it is removed from your estate.

Personal Items

• Reserved Benefit: If you give away things like furniture or artwork but still use them rent-free, they stay in your estate.

• No Reserved Benefit: If you stop using them or pay rent, they are removed from your estate.

Examples

• Land: A donor gives land to their son but keeps farming it rent-free. It stays in their estate. If they pay rent, it is removed.

• Personal Items: A donor gives a vase to their daughter but keeps it at home rent-free. It stays in their estate. Paying rent removes it.​​​

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To avoid inheritance tax, make sure rent is paid and records are kept.