Parent Transferring Ownership

Richard_Webster

My main concern is that my brother got into a lot of financial trouble 3 years ago, had his house repossessed and had a CCJ for something. He now rents but is desperate at some point to get back on the property ladder and I am worried that he may be able to raise a mortgage against my dads house once he has part ownership and if it all goes wrong again my dad could end up with no home.

OP's brother cannot mortgage part of a house. He would need OP's signature and that of sister for a mortgage on the whole of the property and they would generally be jointly responsible for the mortgage debt - something they obviously should not agree to.

You have already been told that transfers of property made to avoid paying for residential care (where there is not medical need to qualify for free NHS care) can be set aside.

Also, even if the father lives for 7 years the gift is ineffective for inheritance tax purposes unless the father pays a full market rent, because he has retained a benefit in the property by continuing to live there.

housebuyer_abc

I think what you are proposing is despicable. Why should everyone else pay for your father's care when he has more than enough 'money' to pay himself?

Taking out the moral issues...

Should your father not live seven years (or need care in that time) all the 'asset-stripping' in the world won't save you from the tax and/or care-fees that will be levied

sunshinetours

If your fathers assets are under £325k currently then there really isn't an IHT need to do this anyway as there will be no IHT on his estate

For nursing homes funded by local authority I believe they ask about any assets gifted in the previous 6 years.

Take proper legal advice as giving away your own home is a pretty serious matter for anyone especially if it is to multiple people

not_tonight_josephine_2

housebuyer_abc wrote: »

I think what you are proposing is despicable.

I think this is extremely harsh! I sometimes wonder how many people who come onto these forums to slate people for buying their council house/claiming benefits/trying to arrange care without giving up their home* would practice what they preach given the option!

I agree that the state should not sponsor care for the elderly just so that they can leave a nice big inheritance for their children, but if the system has loopholes allowing people to do this (and as many have already pointed out, it's quite possible that they won't be able to in this case) then inevitably people will make use of them. Child abusers are despicable, terrorists are despicable - I don't think the OP is.

It's also worth bearing in mind that most pensioners who own their own home outright will have paid (in real terms) hundreds of thousands of pounds in taxes over the years, so could hardly be described as scroungers!


* delete as appropriate

Fire_Fox

Asset stripping leaves the elderly with fewer options as they will be obliged to accept the level of care offered by the state and no longer have the option to go private. My grandmother had little in the way of savings when she was last taken into hospital from her sheltered housing.

By then in her eighties, she was struggling to maintain her medication regime, not feeding and washing herself as regularly as she had, falls .... but she could make a cup of tea which was apparently sufficient to prove she could live independently. :rolleyes: It took five months taking up a hospital bed and fighting before the NHS agreed to fund her going into a home.

In the end my grandmother was in the most wonderful nursing home for just three weeks before she died. Should my parents ever need personal care I will not hesitate to sell their flat to pay for it rather than wait for the experts to decide. We have power of attorney already set up, so there will be no need to gain the permission of siblings as the OP would.