Q: There is a mother wanting to transfer her home under one of her son’s name, but there is an issue. Here in the UK this is possible through a UK inheritance tax law, known as the 7 year rule. The idea is that when the transfer of ownership is made, the person who gifts the property has to live for 7 years for there to be no inheritance tax enforced on the one who was gifted it. Apart from this condition, there is one more. The one who made the gift is unable to benefit from it for 7 years. This means they are not allowed to live under that roof, nor are they allowed to receive profit from it if rented, because the idea is that it is not theirs to benefit from until the 7 years come to pass. After which, they are able to benefit from it i.e. they can live under the roof if the one who now owns it permits this. The problem here is that the mother doesn’t want to relinquish power over her property, and says she’ll only transfer the house under her son’s name if she is able to stay in the house and benefit from it. In other words, she would only be doing this to avoid inheritance tax while she has no interest in allowing her son to benefit from the property while she is alive. The only legal way the mother is able to stay in the house and use it as a permanent place of residence, will be as a tenant by which she is subject to paying a rent to the new owner (the son) at a market value. At the moment, the mother receives income from the state, and is letting two rooms in the house and plans to let a third. She has no other residence in the UK, and if she decides to transfer her home under the 7 year rule, she will be obliged to pay rent to her son, which she doesn’t like the idea of, unless her son gives her back the money. The question is, would it be permissible for the mother to stay in the house while they pay a rental market value to the son and then the son give back this money to his mother?
A: In order for the gifting to be valid, it is compulsory that the one who receives the gift has complete control over the gifted item, property, etc. If the mother does not wish to relinquish control, then the gifting will not be valid.
And Allah Ta’ala (الله تعالى) knows best.
Answered by:
Mufti Zakaria Makada
Checked & Approved:
Mufti Ebrahim Salejee (Isipingo Beach)