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    • katy123
    • By katy123 5th Sep 17, 6:10 PM
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    katy123
    Gift from father to son
    • #1
    • 5th Sep 17, 6:10 PM
    Gift from father to son 5th Sep 17 at 6:10 PM
    Grandad wants to gift a house (not main resident) to his eldest son (there are 2 sons). The other son has already (many years ago) received a property. As grandad is in his 80's, and wish to make this gift, how can dad protect himself in case grandad dies and the other son claim it was a forced gift? I understand about being a PET and there is no mortgage on the house. It's a simple TR1 form I think, but is there an addition step to prevent a potentioal accusation from the other brother? THanks
Page 1
    • Thrugelmir
    • By Thrugelmir 5th Sep 17, 6:12 PM
    • 55,870 Posts
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    Thrugelmir
    • #2
    • 5th Sep 17, 6:12 PM
    • #2
    • 5th Sep 17, 6:12 PM
    They'll be a potential CGT liability to be settled. Even if the consideration is zero. Seek advice.
    "Wide diversification is only required when investors do not understand what they are doing." - Warren Buffett
    • katy123
    • By katy123 5th Sep 17, 6:22 PM
    • 206 Posts
    • 6 Thanks
    katy123
    • #3
    • 5th Sep 17, 6:22 PM
    • #3
    • 5th Sep 17, 6:22 PM
    They'll be a potential CGT liability to be settled. Even if the consideration is zero. Seek advice.
    Originally posted by Thrugelmir
    No CGT, just change PPR (a couple of mains ago) was main resident.
    • 00ec25
    • By 00ec25 5th Sep 17, 8:48 PM
    • 5,354 Posts
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    00ec25
    • #4
    • 5th Sep 17, 8:48 PM
    • #4
    • 5th Sep 17, 8:48 PM
    so this is the same property you were asking about 2 weeks ago:
    http://forums.moneysavingexpert.com/showthread.php?t=5695251

    your father can't "protect" himself from sibling bitterness

    one approach would be for GF to write a letter explaining exactly what he has done and why and send it to both his sons, then if they fall out they can wave it in each other's faces in court as "evidence"

    BTW, yes GF won't face CGT, but your father will. You still haven't grasped how CGT works and as GF will continue living there it is not a PET, it is a GWR - although you say GF's estate is not above the IHT threshold so tax may never be payable. But don't make the mistake of assuming it is outside GF's estate after 7 years, it won't be.
    • G_M
    • By G_M 5th Sep 17, 9:02 PM
    • 41,921 Posts
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    G_M
    • #5
    • 5th Sep 17, 9:02 PM
    • #5
    • 5th Sep 17, 9:02 PM
    Why does he not simply write a will, leaving this property to his son (and explaining why). He can then split the rest of his Estate equally between all the sons (daughters, grandchildren whatever).

    If a solicitor draws up the will there is unlikely to be a successful challenge by the other son.

    As 00ec25 says, gifting it now 'with reservation' (ie still living there) means the property will be included in his estate for IHT purpises either way.
    • katy123
    • By katy123 5th Sep 17, 9:23 PM
    • 206 Posts
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    katy123
    • #6
    • 5th Sep 17, 9:23 PM
    • #6
    • 5th Sep 17, 9:23 PM
    so this is the same property you were asking about 2 weeks ago:
    http://forums.moneysavingexpert.com/showthread.php?t=5695251

    your father can't "protect" himself from sibling bitterness

    one approach would be for GF to write a letter explaining exactly what he has done and why and send it to both his sons, then if they fall out they can wave it in each other's faces in court as "evidence"

    BTW, yes GF won't face CGT, but your father will. You still haven't grasped how CGT works and as GF will continue living there it is not a PET, it is a GWR - although you say GF's estate is not above the IHT threshold so tax may never be payable. But don't make the mistake of assuming it is outside GF's estate after 7 years, it won't be.
    Originally posted by 00ec25
    Writing a letter is a good idea. I like that, thanks.
    • katy123
    • By katy123 5th Sep 17, 9:27 PM
    • 206 Posts
    • 6 Thanks
    katy123
    • #7
    • 5th Sep 17, 9:27 PM
    • #7
    • 5th Sep 17, 9:27 PM
    Why does he not simply write a will, leaving this property to his son (and explaining why). He can then split the rest of his Estate equally between all the sons (daughters, grandchildren whatever).

    If a solicitor draws up the will there is unlikely to be a successful challenge by the other son.

    As 00ec25 says, gifting it now 'with reservation' (ie still living there) means the property will be included in his estate for IHT purpises either way.
    Originally posted by G_M
    The other brother will no doubt try to get GF to write a new will in the future (there's always that risk, esp when mentally not sound). My grandad has made it very clear that he wants to make the gift, I just want to know what viable options there are that I can discuss with the solicitor when we come to the transfer. Some solicitors can't think on their feet and need a bit of help, hence I'm exploring possible options. Just like to walk into room knowing all the exits You guys have been great, thanks.
    • katy123
    • By katy123 5th Sep 17, 9:36 PM
    • 206 Posts
    • 6 Thanks
    katy123
    • #8
    • 5th Sep 17, 9:36 PM
    • #8
    • 5th Sep 17, 9:36 PM
    better still, we'll get solicitor to sign the letter as witness of GF's letter.
    • phillw
    • By phillw 6th Sep 17, 9:24 AM
    • 937 Posts
    • 555 Thanks
    phillw
    • #9
    • 6th Sep 17, 9:24 AM
    • #9
    • 6th Sep 17, 9:24 AM
    but is there an addition step to prevent a potentioal accusation from the other brother?
    Originally posted by katy123
    Get the other brother to be a witness to the transfer. If he's already hostile then there isn't much you can do.

    If there was a simple trick then people would use it to protect when they do use undue influence.
    • davidmcn
    • By davidmcn 6th Sep 17, 9:47 AM
    • 6,091 Posts
    • 5,843 Thanks
    davidmcn
    Grandfather instructing a solicitor (and solicitor witnessing the deed(s)) would be sensible, but you can't really prevent the possibility of an accusation. Is it likely anyway? These things are expensive to pursue and unlikely to succeed unless it had actually happened.
    Last edited by davidmcn; 06-09-2017 at 10:06 AM.
    • macman
    • By macman 6th Sep 17, 10:04 AM
    • 41,351 Posts
    • 17,001 Thanks
    macman
    The other brother will no doubt try to get GF to write a new will in the future (there's always that risk, esp when mentally not sound). My grandad has made it very clear that he wants to make the gift, I just want to know what viable options there are that I can discuss with the solicitor when we come to the transfer. Some solicitors can't think on their feet and need a bit of help, hence I'm exploring possible options. Just like to walk into room knowing all the exits You guys have been great, thanks.
    Originally posted by katy123
    If your grandfather is mentally ill then he will not be able to make a will anyway, as the solicitor, if aware of that, would consider him unable to consent to the will. If he does one himself, then the potential witnessses should also refuse to sign it for the same reason.
    No free lunch, and no free laptop
    • xylophone
    • By xylophone 6th Sep 17, 12:28 PM
    • 23,426 Posts
    • 13,622 Thanks
    xylophone
    Grandad wants to gift a house (not main resident)
    No CGT, just change PPR (a couple of mains ago) was main resident.

    Your grandfather currently has mental capacity?

    Is the house that your grandfather wishes to gift the house where he currently resides and intends to continue to reside? Or is it not his main residence?

    If it is, will he be paying rent to his son?

    You have looked into Deprivation of Assets should he ever need means tested care?

    Assuming that it is his PPR, then CGT will not be a consideration for Grandfather.

    However, (unless he pays full market rent which the son would have to declare ), it will be a gift with reservation so will still be part of his estate for IHT purposes.

    The son would also become his landlord so would have to comply with the relevant regulations.

    If it is not Grandfather's PPR, then there is a question of his liability for CGT.

    If it will not be the son's PPR then he will need to consider CGT when he comes to sell.

    There would be nothing to prevent you grandfather stating his reasons for making the gift in a letter witnessed by his solicitor.
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