House in a different name for tax purposes?

pennies2pounds_3

Hello all. Was chatting to a friend the other day and he said that because his parents were in the twilight years for want of a better word , they said to him that they were going to put their house in his name. The reason being that if its in his name for 7 years then it cannot be sold and used to pay for his mum or dads care in a home . Is this correct ?
Thanks in advance.

nearlyrich

pennies2pounds wrote:

The reason being that if its in his name for 7 years then it cannot be sold and used to pay for his mum or dads care in a home . Is this correct ? QUOTE]


Apparantly not, local authority can deem them to have voluntarily deprived themselves of assets and charge anyway. I think there is some confusion here regarding inheritance tax where the donor has to survive for 7 years to leave the gift free of IHT. I am sure someone will have the appropriate references to back up the facts;)

Ted_Hutchinson

Help the Aged. Care Home costs Deprivation of Assets

If the parents property is in the Son's name then should he ever need to claim benefits this would have to be declared and obviously it would affect his ability to claim means tested benefits if he has apparently capital in another property.

And from the above site remember Less than 4 per cent of people over 65 live in a care home; this is significantly lower than the likelihood of a son or daughter's marriage ending in divorce.

And the number of people who enter a care home and live there more than six months is also less than 10%.

silvercar

If you leave an estate worth more than about £258,000 excluding transfers to your spouse, there is inheritence tax to pay on your estate. Anything that you owned within 7 years of your death counts as part of the estate. Hence, people pass on large assets like houses then hope to live 7 years. But there are conditions like passing on a house and still living in it rent free. Best to seek professional advice.

The problem with giving houses to your children occurs if they have property of their own. The newly acquired property is not going to be their main residence and so will attract capital gains tax when sold, the base value being the value at the time of acquisition.

pennies2pounds_3

I thought IHT threshold was now £275000 ? . So it looks as if he was incorrect then ?

ManAtHome

Of course if son then decides to evict them, they haven't got a leg to stand on (and it has happened).

claz

my dad is planning to pass on his proprty to me evtually but just to confuse things i will be living abroad in france then

i wonder how this will work out?

Debt_Free_Chick

claz wrote:

my dad is planning to pass on his proprty to me evtually but just to confuse things i will be living abroad in france then

i wonder how this will work out?

Presumably you mean on his death, in which case you'd just sell it!