Anyone on here got any personal or professional experience of this?
From my limited understanding it can be used where someone’s house is passed to someone else but they have right to live there till death.
Does this defeat inheritance taxes or nursing home costs? I am sure there must be some reason for it ?
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I'm guessing 'liferent' is a Scottish term similar to what in England we call a life interest?
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en.wikipedia.org/wiki/Life_estate
Plenty of detail here. Follow the (French) Jeanne Calment link at the end for what went wrong for her landlord. Just suppose his tenant was the 111 year-old man now in the news.
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I have a vague recollection of hearing of a friend of a friend who had something similar but I think that was around a remortgage to raise some money. The family were less than impressed with the fact that the (eventually) deceased had signed away their inheritance without their knowledge, and the company they did it with were considered to be vultures.
Now I've typed that, I think that isn't what you mean as another vague memory has come back to me about someone telling me it was to avoid inheritance tax, but you have to live for a certain period (7 years rings a bell).
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I'm pretty sure that it's 'Professional Advice Required' territory....
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Think for inheritance purposes, you need to have a, not necessarily financial, interest in the property first. IE you have lived there for x no of years first. As a sibling, dependent, companion, etc etc.
could be bollueax of course
Last edited by: Zero on Fri 28 Feb 20 at 15:16
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My understanding is that life rent is a way of giving your partner the right to stay on in your home after your death, but they don't inherit it.
After their death it goes to your heirs. Usually the children of a previous marriage.
Its used where someone wants to provide a home for their "new" partner but to ensure the final inheritance goes to their children. I've no idea how this affects tax etc.
English law must call it something different. Maybe life interest as Brompton says.
Last edited by: martin aston on Fri 28 Feb 20 at 16:56
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My will, drawn up by a solicitor, includes provision for my wife (who is not the mother of my kids) to live in the home we share (and of which I am the legal owner) for as long as she wishes, if I die before her. The ownership of the property passes to my children.
So I don't see why there has to be a special term ("life rent") for it.
Last edited by: James Loveless on Fri 28 Feb 20 at 17:15
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>> So I don't see why there has to be a special term ("life rent") for
>> it.
Your solicitor who I assume is in England (or Wales) would call the device created by your will a life interest trust.
Bobby is in Scotland which has it's own set of legal terminology hence liferent.
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Yes so the cases I have heard about are where parent has signed the house over to the kids for "love and affection" ie no money changed hands, but the liferent is included as a burden.
Not sure if same terminology and process used in English property but in Scotland properties have burdens which are historically passed from owner to owner and typically these will be based on the rules that were included when property first built eg not allowed to keep animals, not allowed to build fences, not allowed to keep caravan, must give access for neighbour to wash their windows, that sort of thing. But liferent is added as a burden which says that for a s long as John Smith is alive, he lives rent free in house but covers normal bills like utilities, rates etc.
There would be no point in doing this unless there was something to gain from it ie not liable for nursing home fees or whatever thus my original question.
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>> Not sure if same terminology and process used in English property but in Scotland properties
>> have burdens which are historically passed from owner to owner and typically these will be
>> based on the rules that were included when property first built eg not allowed to
>> keep animals, not allowed to build fences, not allowed to keep caravan, must give access
>> for neighbour to wash their windows, that sort of thing.
In England we call burdens about keeping animals or fowl or about modifications to houses or number of houses on one 'plot' needing permission 'covenants'. They burden one party, the owner, for benefit of others - neighbours or original vendor. They can be modified by agreement or by order of the Lands Tribunal (these days the Upper Tribunal).
If the home is occupied by wife II for her lifetime but with wife I's offspring taking it on her death then English law would enforce by other means.
And if the motivation for a life tenancy were avoiding Nursing Home fees then Social Security legislation about motives for disposing of assets might be relevant too.
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Liferent - Bromptonaut
