Should a parent’s home be placed in a trust to avoid tax?

A son helped his retired mother by arranging a mortgage and moving the title of her home into his name, while she still resides there. He now wonders if placing the house into a trust would avoid capital gains tax and align with his mother’s will, which splits the estate among three heirs. Experts explain that because the mother continues to benefit from the home, HMRC may invoke “gift with reservation of benefit” rules, meaning the property could remain part of her estate for inheritance-tax calculations.

Additionally, the son may face capital gains tax on any increase in value if he sells or gifts portions of the house. While trusts can be useful, they introduce their own tax liabilities and administrative burdens, and the lesser-known pre-owned assets tax might also be relevant. Given the mother’s good health, there is time to reassess the arrangement, but specialist advice is essential to determine the best course of action.