Signing house over to children?

johnyvonne

brixham wrote: »

Would you not be able to buy the house off her for say £1 and then charge her rent of £1 pa ?

That is very good question.....

kinglewis

Would you not be able to buy the house off her for say £1 and then charge her rent of £1 pa ?

This wouldn't work either.. as it would be deemed as a deliberate act to avoid care costs. The property would need to be sold 'at arms length'.. or for its real value for the local authority to consider it to be a reasonable sale.

They are not daft.

zzzLazyDaisy

At which point of course she would be required to account for the proceeds of sale.

I must say that those who talk about people having free care probably have not visited those residential homes. I had the experience of placing both my mum and my MIL in care homes both of whom went into privately funded homes, but I can tell you that should I require residential care in my old age, my own property will definitely fund my care. Sorry, but I worked hard for my home and I expect it to fund my twilight years should that become necessary.

DVardysShadow

Rob_Marx wrote: »

if she needs the care she should pay for it. why the hell should i pay for it you leech

Ah! A chip off the old block eh? It's the old socialist philosophy, Rob Marx to pay Lenin.

kinglewis

http://www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/@dh/@en/documents/digitalasset/dh_073651.pdf

This is the document which provides guidance for local authorities. Page 37 talks about the deprivation of capital (reducing your capital to avoid the potential cost of care).

Interestingly it covers the use of insurance bonds and that they are not taken into account when judging capital levels. (Although again if one is deemed to have been taken out as a deliberate act to avoid care costs it is considered to be avoidance)

The most promising way is to have your money in a life assurance bond but even then it is by no means 100% safe!!!

donquine

kinglewis wrote: »

This wouldn't work either.. as it would be deemed as a deliberate act to avoid care costs. The property would need to be sold 'at arms length'.. or for its real value for the local authority to consider it to be a reasonable sale.

They are not daft.

Can't see it working from an IHT/CGT point of view either.

The OP would eventually sell. CGT would be due at 18% on the sale price less his base cost of £1, less any available annual exemption (about £10k assuming no other disposals). Massive gain. (I'm assuming the OP doesn't intend to make the house his main residence.)

From an IHT perspective, the OP's mother would be making a part gift part disposal with the gift element about £169,999. £1 is not a market rent, so the occupation of the flat by the OP's mother would be a gift with reservation. I think you could elect to be taxed on the difference between market rent and £1 or follow the normal rules (the house forms part of the OP's mother's death estate), but either way, doesn't sound great.

Tax planning is quite complicated, hence the need for proper help.

zzzLazyDaisy

This fact sheet gives more information

http://www.ageconcernliverpool.org.uk/uploads/documents/Fact%20Sheets%202009/FS40Transfer_of_assets.pdf

poppysarah

johnyvonne wrote: »

Because some people pay tax all there life's thank you.
merry xmas
plus when i was a child i was told that "if you havent got something nice to say then dont say anything.

"If ... we say to any workman, "Drink away as much as you like for when you grow old you shall be supported in comfort at the expense of your colleagues who have not drunk," then clearly we are subsidizing drunkeness."
Mr Cox in 1907
http://hansard.millbanksystems.com/people/mr-harold-cox/1907


The whole argument for avoiding paying for care home fees is full of arguments that upset people.

Rob_Marx

captainhaggis wrote: »

Because someone without their own home would get it for free. Why shoudl the OP's mother have to pay for her care because she's invested wisely when others get it all for free having squandered every penny they've ever made? :rolleyes:

right so what youre saying is the benefits system should be scrapped? can tell you didnt study economics :rotfl:

sunshinetours

donquine wrote: »

... As it stands, those who have worked hard and saved up are in a worse position than those who never bothered.

Hmmm so those who have the ability to choose and pay for private care in a nicer environment and can choose to remain near their families are in a worse position???

Think personally I would rather ensure my assets went to fund a comfortable retirement in whatever shape that takes rather than giving it all away so that some spoilt kids who expect an inheritance can get what is "rightfully theirs". Hope my kids take the same view as me and that we will look after them and support them till adulthood and then they should really be making it themselves (with its ups and downs of course).

Its called personal responsilbility and self pride something that seems rather unfashionable these days