I am 60 years old and live with my parents in the family home. My parents want to ensure that I receive their house when they die (or before) and not be hit with inheritance tax (IHT) or capital gains tax (CGT) liabilities. The property is currently worth £450,000. My understanding is that there is the seven-year rule with the sliding scale for IHT purposes. I intend to carry on living with my parents until they die. Is the best option to gift the property now under the seven-year rule? Or are there other options? 

Arthur Weller replies: 

It is difficult to answer your question sufficiently without knowledge of the assets and liabilities attributable to the estate of your parents. However, there are distinct advantages in waiting until they die and leave the house to you in their will. Firstly, if they gift the house to you now but continue to live in it, this will be a gift with reservation and not effective with respect to IHT. Secondly, if the main residence is left to a direct descendant on death, the estate can benefit from the IHT residence nil-rate band.