My elderly widowed client has made no previous lifetime gifts, but wishes to gift his main residence, worth £700,000, to his son as he believes this will save him inheritance tax (IHT). After the gift, he will continue to live in the property on his own. Will he have to pay rent on the gift for it to escape his estate, and if he dies within seven years will taper relief reduce the IHT on his gift?

It seems inevitable from the facts provided that no IHT will be saved unless your client can afford to pay market value rent for the rest of his life.