12 years ago my DPs (parents) bought a second home as a holiday cottage, under what I believe they called a Reversionary Trust - so they purchased, but it's in mine and my DSis name. As I understand it this means as they are both still with us, the 7 year rule means this is now exempt from IHT?
They pay all expenses (council tax, insurance, utilities, maintenance) to and account in mine and DSis name (we don't touch the account) and typically use the cottage a couple of times a month (clearly not now), plus DSis and I can use whenever we want. It's not let out to anyone else.
DF is now getting to the point of not managing the stairs, and his mental capacity is starting to diminish (DM is as fit as a fiddle) due to a condition he has. Clearly not right now in the current situation, but I want to understand the legal points to this, so DSis and I can help them to make a decision on what to do. I've asked DM but she doesn't know and DF isn't capable of a phone call now. She won't ask him!
Questions:
- if they decide to sell, assume DSis and I are liable for CGT?
- if they decide to rent it out either as a tenancy of 6-12 months or as a holiday let, are DSis and I liable for income tax on the rental value?
Separately, I am looking after all these awful current times to buy a property post divorce being finalised (settlement due any time and will give me a good deposit), and I did have a mortgage AIP so I could start house hunting.
As I am buying a residence for me to live in, do I still only pay Stamp Duty at the normal rate even though in theory I own this other property too?