Consulting engagement
This illustrates, for me, the risk of having a client who is a friend. As a friend I was going to answer his question quickly then I realized that this is more complicated that initially it appears. I often have this niggling thought that friends would be quicker to forgive me should I make a mistake. And that assumption could be highly consequential if it is wrong.
The dollars are significant, and he is one of the wealthiest clients in my portfolio.
Would you require an engagement letter for this client question? here is the client question:
The UK has an onerous second home tax called the Stamp Duty (it would be 22,000 pounds for us which is roughly $30,000). People with 2nd homes around here avoid this tax by putting their home in their kids' names. Our UK solicitor has confirmed that this is legal and acceptable. We are thinking about doing this ourselves and putting the new place in our (adult) son's name even though all the money would come from us. We are working through different outcomes from this scenario. If we were both to die, we are okay with our son simply owning the Scotland place. However, if we needed to sell for some reason, this is a little more complicated. Assuming we had his cooperation, does it sound feasible to have him gift the proceeds back to each of us over a period of years at the maximum allowable annual limit that avoids gift taxes?
