Financial Matters

With David Frederick FCCA | Marcus Bishop Associates | marcus-bishop.com

When is a gift is not a gift?

Acombination of rising house prices hampering first time buyers plus the threat or fear of care home fees has seen many parents transfer their main residence to their children or contemplating the act. Prima facie, this may seem a great IHT strategy as the parents transfer ownership to the children. Some parents view this as a great way to have live in care from their own blood. However, such decisions may not be so good as first thought. The transfer to the child(ren) may be fine. However, here comes the red flag. If the parent(s) continues to live in the property following the transfer of ownership, the gift fails. The gift is caught by what is known as ‘gift with reservation of benefit (GWROB).’ A GWROB arises where an individual transfers ownership of an asset to a beneficiary, but the transferor continues to benefit from it following the transfer. A parent transferring their home to their children but continuing to live in the property is a perfect example of a GWROB. In effect the property will be deemed to still be a part of the estate of the parent(s) for IHT purposes and moreover for any assessment or contribution to residential care home fees in the future. However, there is greater problem arising from the benevolent and innocent act by a parent that needs to be addressed before any attempt to resolving the GWROB. A parent’s transfer of their property to their child, means that the child is now the legal owner and not their parent. Suddenly, the parent has moved from secured residency to being at risk of losing their home. This may arise in three simple steps. Firstly, the child can evict their parent if they desire. To some this may seem farfetched. However, it is a reality in 2022, that some children have forced their parents out of their home sometime after the property transfer has been completed. Some local authorities are battling with this emerging group of homeless people. It is for this reason alone and not any great tax planning strategy that parents should be reluctant and not in a hurry to transfer their property to their children during their lifetime. Secondly, what happens if the child becomes divorced? The spouse of the child would have a legitimate claim against the child’s estate; and that includes the house that has been transferred from their benevolent parent(s). Thirdly, if the child becomes bankrupt, the property will be included as part of the child’s assets. What began as a wonderful parental gesture is no longer so attractive? As parents have through their own action often without professional advice, placed themself at risk of losing their home. This is in addition to the creation of a GWROB. In the past three years HMRC was recovered over £370m from such gifts which have failed. The underlying problem is not the transfer of the property by the parent but the transfer of the property without seeking any professional advice. The professional fees saved is often paid to HMRC a multiple of times. A simple solution to the GWROB problem is for parents not to transfer their main residence to anybody during their lifetime. However, if they wish to transfer the property, a GWROB can be avoided if the parent pays market rent to the child after the transfer of the property. Market rent must be payable for life by the parent. In addition, any such transfer may not be a sanctuary from care fees. Local authorities may regard the transfer as a “deliberate deprivation of assets” by the parent(s). If this is the case, the local authority will take action to recover care fees. Parents should always seek professional advice before any property gift; otherwise, their gift can easily become a GWROB.

Tuesdays 7, 14, 21 & 28 June: Social runs with DPR

7.30pm-8.30pm. Trevor Bailey Clubhouse, Dulwich Common, Dulwich, London, UK map directions. Join Dulwich Park Runners at their club runs at 7.30pm on Tuesday evenings. All standards welcome. enquiries@dulwichparkrunners.com.

www.dulwichparkrunners.co.uk.

Wednesday 8 June: Rule, Nostalgia: A Backwards History of Britain by Hannah Rose Woods

7:30pm – 8:30pm. For more than five hundred years, British politicians, poets, novelists and social commentators have mourned the loss of older national identities, and called for a revival of simpler, better ways of life. Starting in the pandemic, where national rhetoric called on ‘blitz spirit’ and ‘keep calm and carry on’, Hannah guides us back in time through Margaret Thatcher’s call for a return to ‘Victorian values’ in the 1980s, to William Blake’s protest against the ‘dark satanic mills’ of the Industrial Revolution that were fast transforming England’s green and pleasant land, and more. In Rule, Nostalgia, cultural historian Hannah Rose Woods will separate the history from the fantasy, debunk dangerous and pervasive myths about Britain’s past and explore the ways in which nostalgia has historically been mobilised in Britain across the political spectrum, from the radical left to the nationalist right, for both good and ill. Tickets: Book & Ticket £25 (Includes a copy of Rule, Nostalgia. Book RRP £20) Standard Ticket £10. Website for booking tickets is:

https://mct.alleyns.org.uk/page.aspx?id=319

Junior School Hall, Alleyn’s School, Townley Road, Dulwich, SE22 8SU

Thursday 9 June: Statues of Discord in Whitehall and Trafalgar Square

8pm – 9pm: The Arts Society Dulwich lecture at JAGS Sixth Form Centre. Guests welcome, £10 at the door, no booking required. Should there be a column to Nelson in Trafalgar Square? A parliamentary committee in the 1840s said there shouldn’t, but their view was overridden. As more statues are removed, perhaps the succession of works on Trafalgar Square’s fourth plinth has something to teach us. James Allen’s Girls’ School Sixth Form Centre.

www.theartssocietydulwich.org.uk/programme/ lectures

Monday 13 June: Dulwich WI Monthly Meeting

7.30pm-9.30pm. We meet on the second Monday of each month at Vits+Kicks, 57 North Cross Road, East Dulwich, SE22. https://dulwichwi.com

Thursday 16 June: Three Sisters by Heather Morris

7:30pm – 8:30pm From the author of the six million copy phenomenon The Tattooist of Auschwitz comes an astonishing new story, Three Sisters. Inspired by a true story of three sisters, Heather Morris retells the story of the unbreakable bond and a fierce will to survive in this new novel. Rich in vivid detail, and beautifully told, Three Sisters will break your heart, but leave you amazed and uplifted by the courage and fierce love of three sisters, whose promise to each other kept them alive. Two of the sisters are in Israel today, surrounded by family and friends. They have chosen Heather Morris to reimagine their story in her astonishing new novel. Heather will be interviewed by Dr Hester Vaizey. Tickets: Standard Ticket £10. Concession £8. Tickets:

https://mct.alleyns.org.uk/page.aspx?id=325

A Village Books and Alleyn’s School Enterprises Event. The Lower School, Alleyn’s School, Townley Road, Dulwich, SE21 8SU

Saturday 18 June: Nature Reserve Open Day: Garthorne Road Nature Reserve

2pm – 5pm: Open day at Garthorne Road Nature Reserve, Forest Hill SE23 1AA. All welcome. Bug hunts for children. Sorry no dogs. Beadnell Road Forest Hill SE23 1AA.

https://garthorneroadnaturereserve.com

Saturday 18 June: One Tree Hill Allotments Day

12:30pm – 6pm. At the beautiful One Tree Hill Allotments Site’s, there will be tea, cakes, jams, chutneys, and other produce; art exhibits; guided walks; kids’ activities; demonstrations; BBQ; pizzas & cider; and live music. The views from the top of the hill are lovely but getting there is via narrow paths and occasionally a few steps, so bear that in mind. There will be seating and full access at the bottom of the site where the main tea stall and food are. See you all there!

One Tree Hill Allotments, Honor Oak Park SE23 3LB. https://othas.org.uk

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Saturday 18 June: St Augustine’s Church Summer Fair

11am-3pm. Bouncy castle, stalls, cakes, refreshments, face painting, plant sale, bric-abrac, new items & more! Honor Oak Park, SE23

Sunday 19 June: Noye’s Fludde

4pm – 6pm: An incredible tempest, a massive boat and an angry God take centre stage in this imaginative re-telling of the biblical story of Noah, his family, and their unlikely cargo of animals as they fight for survival for 40 long days and nights on the ark. Based on the fourteenth century Chester Miracle Play, Benjamin Britten’s Noye’s Fludde was conceived as a community opera, to be performed by children with one or two adult speaking parts. The work has become a firm favourite, combining the naïve sincerity and humanity of the medieval original with inventive musical material that is as accessible as it is joyful. What’s more, it’s tailormade to show off the array of talent in SE19! For this dramatic tour de force, Crystal Palace’s resident orchestra, the London Mozart Players, will be joined by 100 young singers and actors from local schools, the St John’s Hive choir and the Crystal Palace Recorder Group, plus local amateur string players, all bringing this epic story to life. St John’s Upper Norwood is the ideal venue for this piece – Britten intended it to be performed in a church rather than a theatre. Join us for this dramatic parable of courage and redemption, with its heart-warming rainbow ending that carries the promise of a new beginning. St John the Evangelist, 1 Sylvan Rd, SE19 2RX. Book Tickets at:www.londonmozartplayers.com.

Tuesday 21 June: Entrepreneurs Circle Local Meeting: Dulwich

6pm-8pm (registration from 5.30pm). The Entrepreneurs Circle Local Meeting is a Business Growth Meeting (with some networking) that’s guaranteed to help your business grow... ...because as well as good old networking, our meetings always have a featured content session where we share a practical marketing tactic or strategy that you can use in your business to get more customers and make more sales! www. entrepreneurscircle.org/join to sign up The Clock House (Upstairs) 198a Peckham Rye, East Dulwich, SE22 9QA.

Friday 24 June: Americana Night - Fran McGillivray & Mike Burke, Jack Daw, James Riley

7pm – 11pm: Fran McGillivray (vocals & bass guitar) and Mike Burke (acoustic, electric & resonator guitars, mandola, mandolin & vocals)

are exciting and compelling performers and songwriters with a strong following on the root’s music scene. Their latest album, “Rain”, has received consistently rave reviews. Jack Daw is a union of Rob Anderson and several London musicians, primarily from the local Americana community. Rather than a band per se, Jackdaw is home for songs written by Rob and Wayne Drury, and live performances include a varying combination of the musicians involved. Anglo-American and raised in London, James Riley followed his roots back to Nashville in 2015 for a short trip – which ended up becoming a 2-year odyssey. Whilst in Tennessee he met Grammy-winning producer Matthew Odmark and recorded his debut album “Transatlantica” Tickets are £10 advance, £12 on the door (cash only, sorry). Please see our website for up-todate information on the Covid precautions we are taking. www.thegooseisout.com The Ivy House, 40 Stuart Road, Nunhead, SE15 3BE

Wednesday 29 June: Cooking with Scissors

6.45pm-8pm. An opportunity for local business professionals to meet, make new contacts and gain new business. The last Wednesday of every month. Free Admission. To find out more or register: www.cookingwithscissors.co.uk/. The Lordship Pub, 211 Lordship Lane, SE22 8HA