Best way to 'Give house to kids?'

You would have to SELL your main residence BEFORE you took ownership/signed over on the new house. Otherwise the owning more than one house within 3 years applies and CGT is paid, and CGT will charged on either house as you are no longer a single home owner.

seaniboy wrote:

I think in Scotland we get free care if you are over 65 anyhow regardless of your assets,

Sorry but that's not the case even here in Scotland. Your assets are still taken into account so you may still have to sell the house to pay for care.

The true situation is, at present, in Scotland: Elderly people in residential homes qualify for support of £145 per week for personal care and £65 per week for nursing care. But further support for living and housing costs is means-tested.

Pensioners with assets of £19,500 or more - including the value of their home - do not receive any assistance and those with capital between £11,500 and £19,000 are expected to make a partial contribution. That can mean people have to sell their house to find the money required, although there is now the option of a Deferred Payment Agreement, which means the property is signed over to the council but not sold until after the owner has died. Then the council will take what is owing to them!

See here for details
http://www.seniorsnetwork.co.uk/freecare/

You can sign your house over to your kids but to protect yourself why dont you sign a Deed of Trust, which means that the house is theirs and their responsibility, however they can not sell unless you also approve.

But this doesnt cover you if they fall into arrears with mortgage.

Bossyboots wrote:

The house you are living in would be your nominated main residence and therefore free of CGT. Once that is sold and you are living in the other one, that becomes your main residence so surely is free from CTG. Are you saying that if you sold the second house within three years it would be subject to CTG? I know you have two years to sell it after inheriting before CTG is applicable but I believe that is if you don't move into it.

From http://www.hmrc.gov.uk/leaflets/cgtfs1.htm
"
You will not have to pay CGT when you dispose of your home if all the following conditions are met.

* Throughout the period that you owned it, it was your only home.
"

IE, If you have more than one home, then if you sell one, it comes under CGT rules

BUT - on further reading it seems you can nominate one residence and MAY get SOME relief from CGT

http://www.hmrc.gov.uk/leaflets/cgt1.htm#d1

What if I sell my home?

No chargeable gain arises when you dispose of your home if all the following conditions are met.

*
You bought it, and made any expenditure on it, primarily for use as your home rather than with a view to making a profit.
*
Throughout the period that you owned it, it was your only home.
*
You did actually use it as your home all the time that you owned it.
*
Throughout the period that you owned it, you did not use it for any purpose other than as a home for yourself, your family and no more than one lodger.
*
The house and garden do not exceed half a hectare (about one and a quarter acres).

Even if not all these conditions are met, you may still be entitled to relief. For example

*
if you had more than one home, you may be able to nominate one of them as your main home for the purposes of the relief
*
if all the conditions were met throughout all but the last three years of the period that you owned your home, you will still be entitled to the full relief
*
if you lived away from home temporarily (for example, while working abroad), you may still be entitled to the full relief
*
if all the conditions were met for part of the period that you owned your home, you will still be entitled to some relief
*
if you used part of the building as your home and part for some other purpose (for example, for business purposes or for letting) you will still be entitled to some relief.

You may also qualify for the relief if

*
you sell part of the garden or outbuildings belonging to your home without selling the home itself, or
*
your home is a fixed caravan or houseboat.

Married couples may have relief from CGT on only one home. However

*
you and your husband or wife may each have had a qualifying home before you were married. After marriage you both live together in one of these homes and sell the other. Provided that it is sold within three years of marriage, you may not have to pay any CGT (subject to the normal rules for this relief). If you sell it after more than three years of marriage it may qualify for partial relief
*
there are special rules on divorce and separation.

Suppose the house did not exist. Suppose that it was money in the bank instead.

Would there be any difference in the basic argument? Would people still insist in keeping all their money in the bank so that they didn't have to pay for their own care (assuming that care became necessary) because they wanted to leave it all to their kids?

In reply to whizkid about the 'middle-classes' (!) we're both 70, we own our own home, we've worked hard etc etc, both of us in responsible jobs for many years. Neither of us has the slightest objection to our assets being used to fund our care, should that become necessary. What we worked for should be used for US, for our comfort, extra choice, whatever - even, as lislyloo said, for extra holidays! The only condition we make is that our wishes be taken into account. People talk about 'getting taken into care', but it's still essential to consult people - it's not a jail sentence, no one can be incarcerated against their will!

I feel a lot of hot air is generated because of the whole idea of 'leaving an inheritance'. Because of the crazy hike in house values this is an idea which has spread among many groups of people who would never have given it a thought in the past. We were not left anything and we did OK.

Aunty Margaret