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Spring Cottage Case Study

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Interest in Spring Cottage (“Spring Cottage”) Mark wishes to give Spring Cottage to his son, Gary. Spring Cottage has not increased in value since the death of Mark’s father; therefore, the gift will not give rise to CGT liability. Gifting Spring Cottage to Gary by way of lifetime transfer is contrary to Mark’s instructions and therefore Mark should exercise the option of PDV. Lifetime Transfer: If Mark gave Spring Cottage to Gary by way of lifetime transfer, this would take the form of a PET. Unlike with the Shares, no relief would be available to Mark and either IHT would become chargeable or Mark’s nil rate band would be affected if Mark dies within 7 years. As a result of this, this method would be contrary to Mark’s initial instructions

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