If you have a child or elderly relative who needs somewhere to live and have cash in the bank, falling house prices and low interest rates may tempt you to buy. But make sure you structure the purchase correctly for tax purposes, says Mark Bridge in The Times.
The key issues are capital gains tax (CGT) on any future disposal and income tax on rental income. If you are rich enough, and intend to help your children, the ideal solution is to gift a property outright, says Tony Mudd of independent financial advisers St James's Place. As long as you survive for seven years, the gift is exempt from inheritance tax (IHT) and your children can live rent-free.
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