I am an 81-year-old widow. I own a flat in central London which is my second home. I inherited the flat from my husband who died last year, and there are no capital gains tax issues. On average, I stay in the flat two to three nights a month, and my three adult children, friends and other relatives use it from time to time.

For inheritance tax purposes I would like to give the flat to my three children in equal shares. I realise that to stop this being a gift with reservation of benefit I need to pay rent to my children as the new owners.

How much do I need pay? Should I just pay for the nights that I stay in the flat or should I pay the full monthly rent because I am retaining the ability to stay there whenever I want?

Lauren Rapeport, associate in the private client and tax team at Withers, a law firm, says you are correct that a gift of your London flat will be caught by the “gift with reservation of benefit” rules if you continue to use it, even for only a small number of days a year, after making a gift.

For the value of the flat to fall outside your estate for inheritance tax purposes, you need to be treated as if you were any other tenant, so enter into a formal tenancy and pay an open market rent for your use. This needs to be the case at all times, so your children should have regular rent reviews, advised by a suitably qualified agent. You will need to continue to pay rent for as long as you use the property and need to bear in mind that your children could deny you use of the flat or sell it at any time.

If the flat is available to you year-round, even if you only stay there for a few nights a month, you will need to pay an annual rent. But if the flat is also used regularly by your children and other tenants, for instance through Airbnb, you may be able to argue that you should only pay for the time you use it.

Capital gains tax may be payable on the gift if the flat has increased in value since you inherited it. Your children may also have to pay income tax on their share of the net rental profit at up to 45 per cent. If you intend to continue to use the flat for a number of years, these costs could be significant and erode or exceed any inheritance tax you may save.

If the flat becomes the residence of those receiving the gift, HM Revenue & Customs accepts that you can spend a period of up to two weeks per year there, without that being a reservation of benefit. It can also be possible to avoid the gift with reservation of benefit rules by retaining a share in the property and using it together with all your co-owners.

Any of these arrangements are complex and the practical implications need to be considered carefully before you enter into them. You should take professional advice before taking any steps. You could also consider alternatives such as equity release mortgages to allow you to transfer value to your children, without compromising your use of the flat.

Can I challenge divorce settlement as prices rise?

I’m greatly concerned by rising inflation. It is going to be a lot more challenging for me to manage the property and other assets that my husband and I agreed on after our divorce last year. As this is something that no analysts expected, can I request changes to the financial settlement that we agreed with my ex-husband?

Susi Gillespie, head of family team, partner, mediator and collaborative lawyer at Thomas Mansfield Solicitors, says that this is a very common concern, particularly now when finances are being stretched for all sorts of reasons that could not have been predicted a few years ago. However, the courts like to implement a “clean break” in divorce cases and as such there may be little room for appeal.

One of the ways to challenge the outcome is on the basis of an event happening which is “both unforeseen and unforeseeable” and undermines the basis of the settlement. Indeed, analysts did not foresee an increase in inflation aggravated by such unforeseen events as a global pandemic and the Russian invasion of Ukraine, to name just a couple.

However, the circumstances of the case that established this principle were quite different from yours. In Barder vs Barder [1988], Ms Barder killed both children and herself weeks after the divorce. This was not something that could ever have been foreseen and the court set aside their order so that Mr Barder would benefit.

Numerous cases since have shown that an exceptional event affecting an individual family is quite different from the natural processes of price fluctuation as seen today. I would therefore be extremely doubtful that increased inflation, however unforeseen, would be unforeseeable and, therefore, a reason to revisit your settlement.

There is a glimmer of hope. If you are receiving maintenance payments from your ex-husband, your income claims are still open. Most maintenance orders will include an annual review which might be linked to the RPI or CPI index so have a look at the wording.

If you have children, the Child Maintenance Service decides how much maintenance should be paid for them using a rudimentary calculation based on the payer’s income. This will only help if your ex-husband’s income has increased.

Spousal maintenance is based instead on your needs. Consequently, if you can no longer manage your outgoings, you can apply to the court for an increase in payments. The caveat is that your ex-husband must be able to afford to pay. Could he have paid more but you agreed a lower amount? Have his earnings increased? Have his outgoings decreased — perhaps because he is living with a new partner? If it is affordable for him and essential for you, the payments should rise.

If you can’t face applying to the court and have tried all other routes to increase your income yourself, then I suggest you talk to your ex-husband. If history tells you that a conversation would be difficult, perhaps try family mediation. Just because a court might not change things, it doesn’t mean you can’t agree to do so between you.

The opinions in this column are intended for general information purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors are not responsible for any direct or indirect result arising from any reliance placed on replies, including any loss, and exclude liability to the full extent.