Legal Charge & Inheritance tax

I am approaching retirement, and wish to plan for my future. Essentially I wish to pass my assets on to my only son, and to avoid inheritance tax (assuming I live for at least another 7 years). I would though, like for him to see some benefit from my money during my liftetime.

My questions are, if I were to make a large one-off payment to my son encompassing most of my wealth, could he use this to pay off his mortgage and instead allow for me to have a legal charge against his property? If so, what happens to that 'charge' upon my death? If later on we fell out and I wished to recoup my money, does the charge only allow for this at his discretion?

I would not intend to receive any recompense back from him in lieu of the money I have given him, but wondered whether the charge would offer me some piece of mind. Would I need to declare this charge on any of my applications for benefit such as pension tax credits etc, eg would it count as capital in the same way as owning property or land does?

Thank you

Reply to
minukred
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The effect of the charge is that it will make you fail to avoid inheritance tax on the sum of money involved, because it documents that he owes you the money, and therefore it wasn't a gift. So the

7 year clock never even starts ticking.

If he is your only heir, then he inherits it and can nullify it.

That would depend on the terms of the charge. Mortgage lenders have a charge on a borrower's property which allows them to kick the owner out and sell the property from under him. Yours would probably be rather weaker, but it would at least prevent him from selling his house, should he want to move, until you release the charge.

Peace of mind? How? What exactly would it reassure you of or against?

Probably, because it amounts to money which is still yours and you have merely lent him.

Reply to
Ronald Raygun

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