7 year rule on gifting property

wise_fool

My question was aimed at Rob who is an experienced solicitor that specialises in asset protection, and it really related to the issue of assessment of care fees, as he has made contradictory statements on this thread.

I would agree wholeheartedly that transferring a property to children is very unwise for many reasons.

But I do happen to know the rules, and I can say with a degree of certainty that the local authority would not be able to touch the house if the mother required care 7 years after gifting the house. This has nothing to do with the IHT rules which people get mixed up with, my answer would be the same if she needed care say 5 or 6 years after.

Most professionals are unclear on the rules - and I am not in the business of educating them as they should know better. I am just interested in hearing Rob's slant on this.

wise_fool

RobS77 wrote: »

Hi WF- Thanks for the post, I always tend to advise clients that the passage of time tends to give the transaction more weight, but having just looked up the relevant bit of CRAG (thanks to a London firm!) the issue of timing doesn't necessarily seem to be an issue.

Once again I don't think you have answered my question as I'm not sure you fully understand the CRAG rules.

Yes, the Local Authority can go back any length of time to ascertain what you've done with your assets. A part of the test is whether care was forseeable. If it wasn't then that's the end of the matter. I will leave it there as the fact you had to find out parts of the legislation from another law firm confirms my suspicion that you are completely out of your depth on this issue.

RobS77

wise_fool wrote: »

Once again I don't think you have answered my question as I'm not sure you fully understand the CRAG rules.

Yes, the Local Authority can go back any length of time to ascertain what you've done with your assets. A part of the test is whether care was forseeable. If it wasn't then that's the end of the matter. I will leave it there as the fact you had to find out parts of the legislation from another law firm confirms my suspicion that you are completely out of your depth on this issue.

You see, I find this very peculiar- didn't you ask about NRB Wills and whether anyone used them anymore? Whereas they are still worth doing for unmarried couples: do you agree? Whereas you are a hardcore CRAG geezer who knows asset protection backwards. So presuming you are STEP qualified, why did you ask re-NRB: if you specialise in asset protection, why waste the NRB of a first unmarried partner to die? Or were you just "trying me out?"

I guess that if on the death of a first partner, IHT was payable, you might fill your own Rule 15 letter with a bit of jargon, and let your PII guysknow as well?

Just to quote:

Does anyone still use nil rate band discretionary trusts anymore? I don't see the point when there are better options available?

You agree the aggregated NRB isn't available for unmarried couples I presume, without the use of a NRB trust? Or is there another way of aggregating the same? You didn't actually reply to that point, so please explain why?

Oh, and you haven't answered the point either about the appointment of a life interest from a DT, which Kessler agrees with me that you can do. All the partners who are STEP qualified at my place agree you can do this as well: do you? So a DT can serve exactly the same purpose in claiming the relief as a flexible life interest?

wise_fool

Now then Rob, this thread is about a house that was gifted to a relative 7 years ago and moved on to the issue of deliberate deprivation of assets.

RobS77 wrote: »

Where the client continues to occupy the property then they certainly have grounds to set the transaction aside- there is no argument for them doing it on the basis of IHT- as it would qualify as a GROB- so the only reason for the transaction would have been deliberate deprivation. The LA could either bankrupt the client or go to court to have the transaction set aside. I presume you know that such a transaction is in breach of CRAG?

But despite making this rather pompous statement and then later contradicting yourself, it quickly transpired you have no idea about the CRAG rules yourself.

RobS77 wrote: »

Whereas you are a hardcore CRAG geezer who knows asset protection backwards.

Well yes, when advising my clients it's handy to know the rules.

Anyway, despite admitting you are rusty (an understatement if ever there was one) in a post you then amended almost 5 hours later to remove any admission that you were wrong, you then bizarrely sought to pepper the thread with questions relating to discretionary and lifetime trusts. There is a thread where a conversation of this nature is already underway, so it may be better to keep it all in one place. I shall therefore endeavour to answer your questions there.

RobS77

wise_fool wrote: »

Now then Rob, this thread is about a house that was gifted to a relative 7 years ago and moved on to the issue of deliberate deprivation of assets.

But despite making this rather pompous statement and then later contradicting yourself, it quickly transpired you have no idea about the CRAG rules yourself.

Well yes, when advising my clients it's handy to know the rules.

Anyway, despite admitting you are rusty (an understatement if ever there was one) in a post you then amended almost 5 hours later to remove any admission that you were wrong, you then bizarrely sought to pepper the thread with questions relating to discretionary and lifetime trusts. There is a thread where a conversation of this nature is already underway, so it may be better to keep it all in one place. I shall therefore endeavour to answer your questions there.

Erm, I amended it on the basis that it occurred to me that a DT to appoint out a LI would perform exactly the same purpose: simple really. As you will appreciate, sometimes your opinion changes when you thin something through. Agree?

wise_fool

RobS77 wrote: »

Erm, I amended it on the basis that it occurred to me that a DT to appoint out a LI would perform exactly the same purpose: simple really. As you will appreciate, sometimes your opinion changes when you thin something through. Agree?

As I said, this is not the place to continue the conversation. You are being entirely disrespectful and disruptive to the original poster and other readers by deviating far away from the original topic.