Why grandparents' IHT mitigation plans could lead to future strife

'Anyone tempted to follow suit may be wise to hesitate'

clock • 4 min read

Don’t be so trusting Grandma. Richard Burgess outlines why well-intentioned grandparents looking to help their grandchildren while mitigating their IHT liabilities could be storing up trouble...

A recent article in The Times outlined how a grandparent purchased a house worth £825,000 for her grandchildren and discussed the potential inheritance tax (IHT) advantages of doing so. While the proposition that someone can simultaneously reduce the tax payable on their death and help family members onto the property ladder sounds attractive, this course of action is fraught with risks. The property in question was placed into a bare trust. This means the children will become entitled to their share of the property on turning eighteen. When all the grandchildren are of age, they c...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Tax planning

IHT on pensions: Getting the practicalities right

IHT on pensions: Getting the practicalities right

Practical refinements needed to make reforms work effectively

Emily Deane
clock 15 October 2026 • 4 min read
Why a higher CGT rate may not mean most business owners pay it

Why a higher CGT rate may not mean most business owners pay it

While it is entirely possible that CGT rates could rise sharply in the Budget, Chris XX remains sceptical that the majority of genuine business owners will ultimately pay tax at the full headline rate...

Chris Riley
clock 14 October 2026 • 4 min read
Budget Media Watch: Chancellor will not hike CGT to match income tax

Budget Media Watch: Chancellor will not hike CGT to match income tax

Smaller rise possible

Alex Sebastian
clock 14 October 2026 • 2 min read