Can I lose my house

turtle_3

Years ago my father sold his house due to ill health and paid my brothers mortgage off and went to live with him. I had recently left my violent husband and was living in apauling conditions with my disabled daughter.So my father bought me a house , well gave me 2 3rds of the cost of it I had sold my previous house and split the money 50/50 with my husbands so I had enough to put a 3rd of the money towards it.Even though the house was bought for me my father would not sign it over to me as I was still married ( another LONG story ) .So the house was bought in my fathers name but a trust deed was made out by a solicitor stating how much I had put towards it and that I had a registered interest ,the land registery also stated this .My divorce finally came through last year and 6 months later the house was transfered fully into my sole name .Whats worrying me now is I have been told there is a chance I can lose this house as my father is 84 and in ill health and as the deeds was transfered into my name with no payment then if something happens to him within the next 7 years the house will be classed as part of his estate.I am so worried that I can't sleep this house is all I have and I am on benefits so I can't afford to get any legal advice .
Does anyone know where I stand legally ?

jenniferpa

I would suggest you go to the CAB. However, my first thoughts are as follows:

The house is legally yours. However, it is true that if your father dies within 7 years of gifting his 2/3 interest in the house to you, that 2/3 interest will form part of his estate for the purposes of calculating IHT. Please note, it's not part of his estate, but it could mean that IHT could be payable. There may be further complications if the house was originally held in joint tenancy, as opposed to tenancy in common, although I imagine that is covered by the original trust deed.

The issue here is how much will his total estate be worth? If it is less than (currently) £275,000, including his gift to you, less any allowable expenses, IHT will not be payable. The possible problem here is how much was his 2/3 of your house worth? If it was more than £100,000 then his estate will not be an exempted estate, even if the total value is under the threshold. Having said that, though, this does not mean that IHT will necessarily be payable, simply that there are a lot more forms to fill in. Also, you should note that the estate (in the form of the personal representatives aka the executor) is responsible for paying any duty.

The other issue is does your father have a will? And if he does, does it simply split the estate between you and your brother?

You need to talk to your father, and also go to the CAB. This is an extremely complex issue.

Jennifer

turtle_3

Thank you so much for taking the time to reply Jenniferpa

There may be further complications if the house was originally held in joint tenancy, as opposed to tenancy in common, although I imagine that is covered by the original trust deed.

I'm not sure exactly what you mean by that .. It was in bought in my fathers sole name - he lived with my brother - but he did come to live with me as he was ill 3 months before the house was transfered into my sole name

. The possible problem here is how much was his 2/3 of your house worth?

The house was bought in need of repair and modernisation for very little 35k I got a job and slowly over the years paid for all the repairs but it was friends doing it, or friends of friends etc so I have no proof of all the extra money I have invested in the property.My father has only small savings and the house is worth considerably less then the IHT thresh hold.My main worry is I do not get on with my brother ,he knows what I have invested in the property and was told by my father that his mortgage was paid off and this house was bought for me.I dreaded the thought of bringing up making a will with my father but knew I had to .I talked to him told him my worries and my father said don't be stupid he's your brother I do not need to make a will , the house was bought for you .Grrrrrrrr thats that as far as my father is concerned, no will he's to set in his ways and see's no wrong in my brother.

jenniferpa

It's times like this I'm very happy to be an only child.

First off, I'm not an expert, but this is my understanding of the situation (as I said before, go to the CAB)

So, the worst possible scenario is that your father dies intestate, sometime in the next 6 or 7 years. I'm assuming that it's just you and your brother? In this case, all of his assets (bank accounts savings etc) less any allowable expenses (e.g. funeral costs, outstanding bills) will be distributed to each of you equally. Now how much do you think the market value of the house was at the time of transfer? If it was less than £100,000 you don't need to worry about the way it was held when it was owned by your father. No IHT will be due. If it was worth more than that, but the total of his assets was less than £275000, IHT will still not be due (I believe). Even if IHT was due, my understanding is that not only is it the estates responsibility to pay that tax, any possibly exempt transactions (i.e. the value of your house) use up the nil-rate band first. So even if your father wrote a will leaving his entire estate to your brother, if IHT was due at all, he (your brother) would have to pay all of it. They cannot take your house from you. I believe that it used to be (pre 1996) possible to force gifted property back into the pot, as it were, but that's no longer the case. Also the longer your father lives, the value of the gift is reduced.

I don't think you have anything to worry about, but go to the CAB!

I'm sure the whole thing will be pretty messy (why people think a will isn't necessary is beyond me). However, it's going to be all about paperwork and rankling with your brother, not losing your house.

Jennifer