Hi. I am currently discussing agreements with my wife through mediation. Essentially, an agreement that we both are happy with is that I purchase a place for her and my son that they can stay in.
For this property, I would like it to be both my ex-wife’s, but also my sons - 50% each. My son isn’t yet 18, so I have two choices I think:
1. Setup a mesher order, where I keep 50% of the property in my name and give to my son when he is 18. I believe in this the only tax due is Capital Gains Tax when the property move from me to my son when he turns 18.
2. Setup a trust, where my son is the beneficiary for his 50%. In this, I think Inheritance Tax is due on the trust (which seems complicated).
Has anyone done anything similar? I’m struggling for guidance around this, though it seems that for the mesher order is simpler tax wise.
A Mesher order is where your ex can't afford to pay your share now so has to pay it at a trigger point in the future.
What you are proposing is completely different. You are buying a property for your ex but will own half of it. How does she feel about that? Usually if there is sufficient funds a clean break is what is preferred so your finances are completely separate.
Thanks for the response. Yes, she is happy. Essentially, we have a choice of both renting, or the above scenario due to Capital Gains Tax. As I am putting more into her side of the divorce to help her out, I’d like to ringfence some for my son. I just can’t work out how best to do that.