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  • FIRST POST
    • MrEnigma
    • By MrEnigma 20th Mar 17, 7:16 PM
    • 24Posts
    • 1Thanks
    MrEnigma
    Gifted House
    • #1
    • 20th Mar 17, 7:16 PM
    Gifted House 20th Mar 17 at 7:16 PM
    Hi group.

    Last June my mother gifted me her house which was at the time worth £285000.
    I was renting a property at the time, so thought it best to move in with her.

    Question is: Do I have to charge her rent? In order to comply with any tax rules.
Page 2
    • gettingtheresometime
    • By gettingtheresometime 20th Mar 17, 9:04 PM
    • 2,089 Posts
    • 4,484 Thanks
    gettingtheresometime
    Hi group.

    Last June my mother gifted me her house which was at the time worth £285000.
    I was renting a property at the time, so thought it best to move in with her.

    Question is: Do I have to charge her rent? In order to comply with any tax rules.
    Originally posted by MrEnigma
    If my son charged me rent after I'd given him the house I'd wonder if I'd brought him up correctly.

    I'm wondering if this isn't a case of you charging her rent for a period of time, then kicking her out so she'll be homeless so will apply for sheltered housing.

    Yes I know I'm a cynic
    Lloyds OD / Natwest OD / PO CC cleared thanks to the 1 debt v 100 day challenge
    • MrEnigma
    • By MrEnigma 20th Mar 17, 9:07 PM
    • 24 Posts
    • 1 Thanks
    MrEnigma
    If my son charged me rent after I'd given him the house I'd wonder if I'd brought him up correctly.

    I'm wondering if this isn't a case of you charging her rent for a period of time, then kicking her out so she'll be homeless so will apply for sheltered housing.

    Yes I know I'm a cynic
    Originally posted by gettingtheresometime
    I just want to do things correctly.

    I will get in touch with another STEP solicitor, as I didn't ask the question 1st time around.

    Thanks for the replies
    • gettingtheresometime
    • By gettingtheresometime 20th Mar 17, 9:21 PM
    • 2,089 Posts
    • 4,484 Thanks
    gettingtheresometime
    I just want to do things correctly.

    I will get in touch with another STEP solicitor, as I didn't ask the question 1st time around.

    Thanks for the replies
    Originally posted by MrEnigma
    Correctly? In what sense ? Financially or morally?
    Lloyds OD / Natwest OD / PO CC cleared thanks to the 1 debt v 100 day challenge
    • MrEnigma
    • By MrEnigma 20th Mar 17, 9:37 PM
    • 24 Posts
    • 1 Thanks
    MrEnigma
    Just to be clear. If rent had to be paid at the market rate. Then I would just pay the tax on it myself, and of course not take any rent from her. Further reading tonight suggests that because the estate is less than 325k, then no IHT threshold will be hit. As from April 2017 the threshold is £325,000 + £100,000. Hope that answers your question. As indeed I have now it seems answered mine.
    Thanks for help. Those that were helpful.
    Can a mod please this thread now.
    Thanks
    • Pixie5740
    • By Pixie5740 20th Mar 17, 9:39 PM
    • 9,900 Posts
    • 13,515 Thanks
    Pixie5740
    You'd pay the tax on what yourself? The imaginary rent? That's not how income tax works.

    As for the thread being closed....there are no mods.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • Red-Squirrel
    • By Red-Squirrel 20th Mar 17, 9:45 PM
    • 673 Posts
    • 1,260 Thanks
    Red-Squirrel
    Why would she owe you rent when you live together in a house that you own that she used to own?

    Did you pay her rent when you lived in her house when it belonged to her?
    • MrEnigma
    • By MrEnigma 20th Mar 17, 9:53 PM
    • 24 Posts
    • 1 Thanks
    MrEnigma
    You'd pay the tax on what yourself? The imaginary rent? That's not how income tax works.

    As for the thread being closed....there are no mods.
    Originally posted by Pixie5740
    NO mods eh?

    Interesting

    That's my last comment, as it seems you guys just want to belittle and not be helpful, which it seems you can do, as there are no mods.

    I'm done.
    • Keep pedalling
    • By Keep pedalling 20th Mar 17, 9:56 PM
    • 2,919 Posts
    • 3,091 Thanks
    Keep pedalling
    Your mother was foolish to give her major asset away, as it means she is no longer financially independent and is vunable if something happens to you. What would happen if you died first?

    If your have not thought about this, and you have children, or estranged siblings or your mother is divorced and your father is still alive then you had better make sure you have a will in place that returned the house to her alone.

    And as others have said there is no 3 year statute of limitations on DoA.
    Last edited by Keep pedalling; 20-03-2017 at 10:53 PM.
    • getmore4less
    • By getmore4less 20th Mar 17, 10:44 PM
    • 28,045 Posts
    • 16,806 Thanks
    getmore4less
    there were better ways to do this, the issue with gift with reservation which an appreciating asset is you can not be sure there will be no IHT.

    If she had just had you move in and gifted you 1/2 the house it would have been a lot simpler.
    • xylophone
    • By xylophone 21st Mar 17, 12:00 AM
    • 20,997 Posts
    • 12,042 Thanks
    xylophone
    With regard to DoA

    http://www.payingforcare.org/deprivation-of-assets

    There are no time limits on how far a Local Authority can go back when considering deprivation of assets. Additionally, if the property was given away before you needed care, the Local Authority could ask the recipients of the property to pay a contribution towards your care.

    Re POAT (should it become relevant)

    https://www.stoneking.co.uk/literature/info-sheets/guide-pre-owned-assets-tax

    The Family Home
    Basic guidance is to make gifts of part of a property, but to sell 100% and not part to avoid a POAT problem. Gifts of a part share in a house, where donor and donee both occupy it, such as child living with elderly parent, or at least staying regularly, should be protected from POAT provided the donor continues to pay at least a fair share of the outgoings. For example, in the case of a gift by the parent to children of a 75% share as tenants in common, the parent might still need to pay 50% of the running costs (not just 25%) to reflect a fair share of actual usage.
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