Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • macman1977
    • By macman1977 10th Jul 17, 10:03 AM
    • 8Posts
    • 1Thanks
    macman1977
    Transfering home ownership from my mother to me
    • #1
    • 10th Jul 17, 10:03 AM
    Transfering home ownership from my mother to me 10th Jul 17 at 10:03 AM
    Hi,
    I'm new to the forum and I know aspects of this have been covered elsewhere but a bit of guidance advice to see if I'm getting this right would be appreciated.


    My mother and father owned a house together that they purchased in 2000. They were 'tenants in common' I believe. Unfortunately my father passed away in 2001, and my mother has continued to pay the mortgage with contributions toward it from myself. I have lived in the house with her since then. Now 17 years later she is in good health and still works full-time as do I, however we're both getting older (I'm 40 now) and we're thinking it would be best to transfer the ownership of the house from her to me as currently I have no claim to the house, my name is on nothing etc...we don't want to have to eventually sell it due to inheritance tax and so on. There's no contention or issues with the property, we just want to ensure that we protect what we worked for. I don't own another property, never been married or have any other baggage that might add some kind of complication to the issue.


    The house is worth an estimated £220,000-ish. We have about a £27,000 mortgage left on it.


    From what I've read, this should be quite straightforward - a couple of forms from the Land Registry and a SDLT60 form for stamp duty - which I believe we would have to pay nothing on due to the fact that we don't owe a lot on the house.


    Am I missing something? Is there a nasty shock or some dreaded fee that sounds like it's coming our way if we do this?


    Do I REALLY need a solicitor for this or is it something we can do ourselves?
Page 1
    • Mossfarr
    • By Mossfarr 10th Jul 17, 10:11 AM
    • 408 Posts
    • 533 Thanks
    Mossfarr
    • #2
    • 10th Jul 17, 10:11 AM
    • #2
    • 10th Jul 17, 10:11 AM
    What are you planning to do about the outstanding mortgage? Will you be settling the amount outstanding?
    Its extremely unlikely the mortgage lender will allow your mothers mortgage to continue in her name if she no longer owns the property.
    Last edited by Mossfarr; 10-07-2017 at 10:44 AM.
    • macman1977
    • By macman1977 10th Jul 17, 10:24 AM
    • 8 Posts
    • 1 Thanks
    macman1977
    • #3
    • 10th Jul 17, 10:24 AM
    • #3
    • 10th Jul 17, 10:24 AM
    We'd be looking to transfer the outstanding amount to me as well.
    • 00ec25
    • By 00ec25 10th Jul 17, 10:31 AM
    • 4,535 Posts
    • 3,916 Thanks
    00ec25
    • #4
    • 10th Jul 17, 10:31 AM
    • #4
    • 10th Jul 17, 10:31 AM
    I assume you don't really understand how inheritance tax operates?
    https://www.gov.uk/inheritance-tax/overview

    if mother transfers the property to your name but she continues to live in it then it remains within her estate when she dies and her inheritance tax is calculated. That is called the gift with reservation of benefit (GWR) rule since she continues to benefit from the property by living in it despite not technically being its owner. The transfer is therefore ignored for tax purposes and she is treated as still being its owner.

    equally importantly it is her main home but its only worth 220k so is her estate ever really going to be liable for inheritance tax to start with? Your father is dead, there may be all or some of his inheritance tax allowance still available. Your mother gets her allowance plus an allowance for the fact she is leaving her main home to her children. In total therefore when she dies her estate could have up to £850,000 of tax free allowances

    Instead, by transferring it to you now she is probably doing something that is totally unnecessary and won't take it out of inheritance tax anyway
    • macman1977
    • By macman1977 10th Jul 17, 10:40 AM
    • 8 Posts
    • 1 Thanks
    macman1977
    • #5
    • 10th Jul 17, 10:40 AM
    • #5
    • 10th Jul 17, 10:40 AM
    Ok thanks. No you're right, neither of us really understands our position, that's why we need some advice.


    I think it's unlikely as you pointed out that we're going to get hit by inheritance tax or stamp duty based on our limited understanding. The other concern from my mother's point of view is that effectively I don't have my name on anything regarding ownership of the property and it's a bit of a worry.


    I do have two siblings - both moved away long ago and never lived in this property. In terms of inheritance when she passes away, if we do nothing, surely they get an equal claim of her estate?
    She's keen for that not to happen, as I'm the one who contributed to the house over the last 17 years after my father passed away. It could mean having to sell the home if it has to be split three ways, with myself (being the only one who doesn't currently own a property) coming out the big loser in it.



    Would it be enough for her to state that in her will? If so, would inheritance tax kick in then? (I will read the link you gave!) EDIT: As per the link, it appears not, as the value is under the threshold.

    I'm on good terms with my siblings, but these things happen!
    Last edited by macman1977; 10-07-2017 at 10:46 AM.
    • xylophone
    • By xylophone 10th Jul 17, 10:41 AM
    • 22,369 Posts
    • 12,909 Thanks
    xylophone
    • #6
    • 10th Jul 17, 10:41 AM
    • #6
    • 10th Jul 17, 10:41 AM
    They were 'tenants in common' I believe.
    Did your father leave his interest in the property to you?
    • macman1977
    • By macman1977 10th Jul 17, 10:42 AM
    • 8 Posts
    • 1 Thanks
    macman1977
    • #7
    • 10th Jul 17, 10:42 AM
    • #7
    • 10th Jul 17, 10:42 AM
    Did your father leave his interest in the property to you?

    No as he died suddenly without a will.
    • Clutterfree
    • By Clutterfree 10th Jul 17, 10:59 AM
    • 3,445 Posts
    • 18,923 Thanks
    Clutterfree
    • #8
    • 10th Jul 17, 10:59 AM
    • #8
    • 10th Jul 17, 10:59 AM
    Does your mother have a will?
    If not, when she dies her assets will be split 3 ways between you and your 2 siblings.
    If she writes a will leaving the house to you, how will your siblings feel? You say you are on good terms with them at present, would that still be the case if they lose out?
    Ageing is a privilege not everyone gets
    • Mossfarr
    • By Mossfarr 10th Jul 17, 11:00 AM
    • 408 Posts
    • 533 Thanks
    Mossfarr
    • #9
    • 10th Jul 17, 11:00 AM
    • #9
    • 10th Jul 17, 11:00 AM
    Why doesn't your Mum just write a will leaving the house to you? It can be written in such a way that your siblings have no claim on it.
    She can also tell your siblings that the house will be left to you so it won't come as a shock when the time comes.
    Alternatively, you could consider changing to joint ownership so that when either of you dies the survivor retains full ownership.
    • macman1977
    • By macman1977 10th Jul 17, 11:05 AM
    • 8 Posts
    • 1 Thanks
    macman1977
    Both my siblings are considerably better off financially than me and quite a bit older. We are on good terms but, as you said, strange things happen in these situations, don't they?


    We just want to do the right thing and know that we've done enough to ensure that:


    a. when she dies, I can pick up any outstanding mortgage payments and ownership of the house.


    b. We're not going to get hit with unforeseen fees.


    c. It's not going to be contended by siblings...ok we can't foresee that, but at least the chances of it being successfully split up can be minimized by doing.....?
    • getmore4less
    • By getmore4less 10th Jul 17, 11:06 AM
    • 29,463 Posts
    • 17,610 Thanks
    getmore4less
    If the long term intention is for you to stay in the house as your home then one option would be to legally jointly own the house and document your beneficial interest to reflect your contributions and any gift element that your mother wishes to give you now.

    As there is outstanding mortgage that would need reviewing potentially a joint mortgage on similar terms.

    you them both reflect what you want to happen to your shares in the event of death in your wills, don't rule out the chance you could go first so cover that options as well.


    By going joint owners that protects your mother from you kicking her out if you owned the place.
    • macman1977
    • By macman1977 10th Jul 17, 11:07 AM
    • 8 Posts
    • 1 Thanks
    macman1977
    Alternatively, you could consider changing to joint ownership so that when either of you dies the survivor retains full ownership.


    Ah..that sounds like a good option maybe...? Anyone know how best to proceed with that?
    • macman1977
    • By macman1977 10th Jul 17, 11:08 AM
    • 8 Posts
    • 1 Thanks
    macman1977
    Would the 'join ownership' thing simply be something we'd need to sort out with the mortgage provider and maybe the Land Registry form(s)?
    • getmore4less
    • By getmore4less 10th Jul 17, 11:09 AM
    • 29,463 Posts
    • 17,610 Thanks
    getmore4less
    Alternatively, you could consider changing to joint ownership so that when either of you dies the survivor retains full ownership.


    Ah..that sounds like a good option maybe...? Anyone know how best to proceed with that?
    Originally posted by macman1977
    Start with a broker to assess the mortgage situation.
    • Mojisola
    • By Mojisola 10th Jul 17, 11:09 AM
    • 27,982 Posts
    • 71,139 Thanks
    Mojisola
    my mother has continued to pay the mortgage with contributions toward it from myself.

    I have lived in the house with her since then.
    Originally posted by macman1977
    Why doesn't your Mum just write a will leaving the house to you? It can be written in such a way that your siblings have no claim on it.

    Alternatively, you could consider changing to joint ownership so that when either of you dies the survivor retains full ownership.
    Originally posted by Mossfarr
    Until the mortgage is paid off, the will is the best move. Your Mum can leave a letter with the will explaining her decision - that it is your home and that you have been paying towards the mortgage.

    Once the house is wholly-owned, do the change of ownership to joint owners. Can you put as much as possible into the mortgage so that it's paid off quickly?
    • Clutterfree
    • By Clutterfree 10th Jul 17, 11:41 AM
    • 3,445 Posts
    • 18,923 Thanks
    Clutterfree
    Will you or your mother tell your siblings of her intentions to leave the house to you?
    They may be older and financially secure but it may well still come as a shock. Surely better to inform them now than when your mother dies and emotions will be high and could cause a rift.
    Ageing is a privilege not everyone gets
    • xylophone
    • By xylophone 10th Jul 17, 11:53 AM
    • 22,369 Posts
    • 12,909 Thanks
    xylophone
    You and your mother are both working.


    Had you considered re-mortgaging on a joint mortgage?

    You might borrow enough (within your means) to make improvements /modernise.
    • macman1977
    • By macman1977 10th Jul 17, 12:51 PM
    • 8 Posts
    • 1 Thanks
    macman1977
    Thanks to everybody who has replied.


    I think based on the feedback, we need to enquire about a joint mortgage and joint ownership.


    I will also speak to her about making a will!
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,514Posts Today

4,439Users online

Martin's Twitter