How can I sign a house over to my son?

I know your original question was about how to transfer the title of a house to a son. Can I ask why the mother wants to transfer it?

As a willwriter and former IFA I often come across requests of this nature. There are usually one of two reasons:

1. Reduce the size of the parent's estate for IHT purposes; or
2. Avoid the house being forcibly sold to fund long-term-care.

In the case of 1 the inheritance tax 'gifts with reservation' rules apply, (unless the parent is paying a commencial rent on the property) which would negate the effect of the transfer for IHT purposes.

In the case of 2 the 'Care in the Community Act' allows Social Services to question why the transfer was made; the only logical answer as to why a parent would give up her residence is to avoid long term care costs. It is illegal to dispose of assets to avoid these costs. Social Services would then consider enforcing the son to fund the parent's long term care - again negating the effect of the transfer.

One final point. If the son does own the house what happens if he gets into financial difficulty and is declared bankrupt? What happens if the son (and assuming he is married) gets divorced? what happens if the son dies?

What a costly mistake it could be to transfer ownership.

I'm not so sure that all this applies - transfer of assets to avoid care costs etc. As I understand it, the OP owns 2 houses and only wants to transfer one of them to her son, which he's living in at the moment. (Is he paying rent to his mum for the house that she owns but that he inhabits?)

I think if that was me, I'd want to give the son his own house as a gift. It's not like transferring the title to her own house to avoid care costs, which is the usual scenario we hear about (with monotonous regularity).

The Mum in question is described as an OAP, which is a horrible demeaning term. She's a retired lady, one assumes - widowed or single, perhaps? There are better and more accurate terms than that horrible outdated 'OAP'.

Margaret

TheWaltons wrote: »

So, she has 2 properties. One she lives in. One her son lives in. Both in her name.

She also needs to check the capital gains tax position which would arise if she makes a disposal of the property, as it's not her main residence.

I was told that there is a timespan of seven years, beyond which sons or daughters would be safe from having to pay care costs once they have acquired the property. Has anybody heard this?

Firstly thanks to 'errata' for correcting my earlier statement.

With regards to Chateau and the 7-year rule - in my experience this is a common area of confusion. However ....

The 7-year rule applies to inheritance tax planning (make a gift, and survive 7 years - the gift falls outside of the estate for IHT calculation.); and

The funding of long term care costs is governed by Care in the Community 1990 and I understand there is no time limit.

As a will writer some years ago I was concerned about the validity of using trusts in a will to protect property from funding long term care. The head of legal services for a council advised me that they will look at the background to each and every case. He stated there was no time limit; importantly if you are showing signs of dementia and then you make a will, or transfer assets away from your estate this is a 'clear sign of trying to avoid paying your fees'.

Margartclare has mentioned in a couple of posts that long term care may not be a concern, and that the lady wants to give her second house to her son. I read, and have reread the original post and I missed Margaretclare's angle.
However, I remain confused. The original post talks about two properties, both in mother's name and then states...

His name is on the Deeds of the house he lives in, along with her and his dad (parents).

so I am still not sure which property mother is looking to transfer to her son.