Foreign teenagers could be given £1 million+ British properties by super-rich families to avoid inheritance tax

A tourist has her photograph taken next to a Gold Ferrari in Knightsbridge on August 8, 2014 in London, England. Tourists and car enthusiasts have been flocking to the wealthy London district to see some of the world's most expensive and extravagant super cars. Many of the rich owners from Saudi Arabia and Kuwait come to London to escape the summer heat at home and to show off their cars before moving on to other European cities such as Paris and Cannes. (Photo by )Dan Kitwood/Getty ImagesA tourist has her photograph taken next to a Gold Ferrari in Knightsbridge in London.

LONDON — Super-rich foreign families living in the UK are being advised to give multi-million-pound properties to the youngest member of their family in a bid to put off inheritance tax, according to a report in the Financial Times.

The FT spoke to several tax advisors who said they are telling rich non-domiciled clients to consider gifting properties to their young sons and daughters following a change to inheritance tax announced in last summer’s budget.

Then Chancellor George Osborne moved to close a loophole that allowed non-dom families to avoid inheritance tax on British property if owned through an offshore vehicle. Inheritance tax is charged at 40% for any estate worth over £325,000 ($406,111).

The FT quotes Gary Heynes, the UK head of private client and family wealth at accountancy firm RSM, as saying:

“We are discussing with clients whether they may wish to de-envelope it and gift it to a son or grandchild, to basically pass it on to the youngest adult in the family. If you can push it down to the ownership of someone in their 20s or younger, you’ve deferred the IHT … it could create a group of 18-21-year-old property multimillionaires.”

London areas such as Knightsbridge have long been popular homes to the super-rich from around the world. A Private Eye investigation in 2015 identified £170 billion-worth of British property purchased through offshore vehicles in the last 10 years, with London the biggest hotspot.

You can read the full FT story here.

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