Dont want to loose a property i own to pay for care home.

siemli

:A Thankyou so much rolo1952.
My nan is very special to me, her 3 daughters vowed she would never go into care but i agree there is no other option, i did considder my wife being full time care but we have a family with small children, my nans 3 daughters all work and although live close cannot be there 24/7 to stop her falling down.
My nan has had a cost free time for the last 9 years allowiing her a little more money than usual to do what she wants with.
What shocks me is the comments about the purchase of the propeerty in the first place, im sura anyone in the circumstances with an investment oppotunity like this would have taken it.
Granted the falt could have gone to somone else in the community but my nan and grandad earned that flat...
Aside that the county where we live has an abundance of empty council properties going to waste as does the rest of the country.
I thank everyone for there kind comments of advice, i will find another solicitor who can advise me further.
Thankyou.

sloughflint

I wonder what people's comments would have been if this had been your situation:
My nan still had a 15k mortgage on her property. I had enough money to pay my nan's mortgage off and we decided to bla bla bla.

People have immediately jumped on you but to me the real scandal in all of this lies here:

i spoke to the solicitor who did the deed of trust in 2000, he states he cant advise on tax issues.
I asked him if i should now change the title deeds into my name or just leave it, he could not advise...
So im no further forward.

If he can't advise, then why the heck did he prepare the deed and Will nine years ago?

siemli wrote: »

i will find another solicitor who can advise me further.

Good luck.

Soubrette

sloughflint wrote: »

I wonder what people's comments would have been if this had been your situation:
My nan still had a 15k mortgage on her property. I had enough money to pay my nan's mortgage off and we decided to bla bla bla.

I think people get annoyed when social housing is bought using a loophole. This annoyance probably wouldn't exist if the OP had paid off a mortgage of a privately owned house.

Also its irritating when people are unwilling to use their assets to pay for care when they are older again using loopholes such as trusts. People would probably still be annoyed at this though!

If I were the OP I would get professional advice on this from another solicitor.

Sorry to hear about your Nan having to go into care though

Sou

Errata

my nan and grandad earned that flat...

Nobody 'earns' social housing, they are a deserving case and are provided with social housing for as long as they need it.

Baz_2

Cook_County wrote: »

I think you carved out a lease to your nan for life. You probably owed tax on the value of this lease when you entered into the deed of trust.

The lease is incapable of being assigned elsewhere but nan is surrendering the right and you plan on paying her nothing to surrender that right. Nan may have a CGT bill on the disposal of the right.

You owe CGT at 18% on the gain if the property is sold.

Nan is likely to be treated as depriving herself of the asset.

Your solicitor should have been aware of the consequences which is why I asked if he advised you. You need a new solicitor. This will be an expensive set of mistakes to sort out just when nan needs care, not stress.

Why are you posting this?

It almost seems like you hope that is the case as you don't like the moral aspect of what he has done rather than basing it on any facts? Are you a qualified solicitor or accountant or something similar?

The fact is, the house is not and never has been an asset of his nan. The son owns the house, that's what the solicitor did, set up a deed of trust with Nan being the proprietor and Son being the owner.

Where would a capital gain arise when the deed was set up? He owned the house when he purchased it and still owns the house when the deed was set up, so there's no change in owner or any disposal of any asset.

Yes there will be CGT to pay when its sold, but he doesn't want to sell it so wheres the issue?

As for surrendering rights etc, the deed will be cancelled and his Nan will sign her agreement to that. And that's it really.

Why the scare mongering?

Also, its not surprising that a Solicitor will not get involved in advising on taxation matters etc, you need an accountant for that.

ohmsoft

Don't think absenses have been mentioned with regard to CGT - if the OP is in a position to take up main residence in the place in the future the shoud start to quaify for a proportion of the CGT to be waived (basically the period they live there plus some exluded periods) - As it works on a % of the gain it could work out worthwile.

With regard to deprivation of assets I agree with Baz's post above - Nan has never been the equitable owner of the property so long as the Trust is a valid one so no propblem there.

HMRC may be concerned about IHT - but its below nil rate, so that's ok.

In short, it seems fine to me but you really should get additional legal advice.

bendix

siemli wrote: »

:
What shocks me is the comments about the purchase of the propeerty in the first place, im sura anyone in the circumstances with an investment oppotunity like this would have taken it.

That's the whole point. Nobody would begrudge your nan owning the flat, but you talk about it as your flat and your asset. Legally, it's not. You exploited a situation - the discount was for HER, not for you, and you recognised that by using your own money to put it in her name. So now you are claiming it as your own, while pretending it's hers and acting very immorally, even though you obviously can't see it.

Now it's legally hers, and you're trying to avoid her losing it to pay for her care, and keep it all for yourself.

You dont see the double standards?

Baz_2

bendix wrote: »

That's the whole point. Nobody would begrudge your nan owning the flat, but you talk about it as your flat and your asset. Legally, it's not. You exploited a situation - the discount was for HER, not for you, and you recognised that by using your own money to put it in her name. So now you are claiming it as your own, while pretending it's hers and acting very immorally, even though you obviously can't see it.

Now it's legally hers, and you're trying to avoid her losing it to pay for her care, and keep it all for yourself.

You dont see the double standards?

Yet another one who wishes what he posted is true. But sadly is wrong. Jealousy possibly, dunno.

The property has always been yours and still is. Ignore them.

sloughflint

I am intrigued by this thread. There are two clear camps on whether the set-up will 'work'.

Regardless of the taxation aspect,I still find it frightening that the solicitor who prepared all of this was unable to answer OP's questions regarding safeguarding the asset.Surely the matter of the possibility of care should have been discussed in 2000 and even if not then, at least he should have explained how the process worked like Baz and ohmsoft have here.

I don't understand how it works though.The people who are saying it will work are saying that the Nan never owned the property and yet documentation I've read out of curiosity states that only the tenant has the right to buy and get the discount.

Baz_2

sloughflint wrote: »

I am intrigued by this thread. There are two clear camps on whether the set-up will 'work'.

Regardless of the taxation aspect,I still find it frightening that the solicitor who prepared all of this was unable to answer OP's questions regarding safeguarding the asset.Surely the matter of the possibility of care should have been discussed in 2000 and even if not then, at least he should have explained how the process worked like Baz and ohmsoft have here.

I don't understand how it works though.The people who are saying it will work are saying that the Nan never owned the property and yet documentation I've read out of curiosity state that only the tenant has the right to buy and get the discount.

Yes but once she took up that right, the deed of trust overrides it. i.e she owned it for the period it took to buy it to sign up the deeds. There's no gain as the property would not have increased in value between those two close dates. No IHT as its below the limit etc. Furthermore was that requirement in place 9 years ago?

The risk is that care is needed within the first few years as some councils would take the house into account if it was transfer out within a certain time frame. However 9 years would mean it has certianly dropped out of the equation.

The OP has to get hold of the care terms, like I told him to, to see how far they go back. 3 years I would imagine.

I understand people dont like this. but its happened, but giving out bad and incorrect advice out of spite is just plain ridiculous and frankly childish.