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Question of the week: Mother and son own a buy to let property 50:50. The rental income is divided accordingly. The mother wishes to gift 25% of her share to her son and retain the other 25% for herself. Following the gift, the mother still wishes to retain 50% of the income. While this appears to be a GROB, it is understood that there is an exception under section 102B(3) of the Finance Act 1986 on the basis that: (a) the mother gives away a share only and not her whole interest; and (b) the mother does not occupy the property. Is this correct? Who would be liable to pay the income tax on the rent: son or mother or both?

Copyright © 2025 LexisNexis
Published on: 19 June 2024
Published by a LexisNexis Private Client expert

Article summary

This Q&A considers whether there is a gift with reservation of benefit where an individual makes a gift of an undivided share in a rental property and does not occupy the property.

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Jurisdiction(s):
United Kingdom

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