Introduction
In this scenario, an international private client, let's
call him John, a UK resident in his early 70s and a widower, found
himself confronted with a substantial Inheritance Tax (IHT) bill.
With a UK property worth £1,500,000 and investments totalling
£750,000, John pondered strategies to mitigate the impact on
his wealth without seeking professional advice.
The Risky Plan
In an attempt to navigate inheritance tax, John contemplated
selling his house to his son, a resident of Guernsey, a
jurisdiction with no inheritance tax. The plan involved his son,
who recently liquidated a multimillion-pound business, purchasing
the property, and John gifting the proceeds back while continuing
to reside in the house. The goal was for John to live for another
seven years, aiming to avoid hefty inheritance tax charges.
