transfer of ownership

Oldboy_3

hello you clever people out there, i have a question for you!
My dear old mum lives alone in a big house - all paid for. if she signs over the house to me (deed/title transfer) would i be hit for any tax at any time? its prob worth 250k maybe a little more. could she move out for a few months (got somewhere else to go) then move back it without any issues - liabilities later on?

many thanks in anticipation that someone out there is far cleverer than me!

Wee_Willy_Harris

Perhaps it would help if we knew what you were trying to achieve/avoid?

getmore4less

There are no direct taxes on gifts in the UK.

Can cause issues with CGT, IHT and deliberate disposal of assets.

rach83

Oldboy wrote: »

hello you clever people out there, i have a question for you!
My dear old mum lives alone in a big house - all paid for. if she signs over the house to me (deed/title transfer) would i be hit for any tax at any time? its prob worth 250k maybe a little more. could she move out for a few months (got somewhere else to go) then move back it without any issues - liabilities later on?

many thanks in anticipation that someone out there is far cleverer than me!

From an Inheritance Tax point of view if the total of your mother's estate does not exceed £325,000 then you would not be liable for inheritance tax as it would be deemed an accepted estate by HMRC. If she was to gift the house to you and her total estate exceeds £325,000 she would have to live for 7 years to avoid you having to pay any tax.

As someone has already stated there could be issues with CGT.

noh

rach83 wrote: »

.................................................. If she was to gift the house to you and her total estate exceeds £325,000 she would have to live for 7 years to avoid you having to pay any tax.

As someone has already stated there could be issues with CGT.

If she continued to live in the house without paying a market rent then it would be a gift with reservation and would still be included in the estate for IHT purposes.

RabbitMad

getmore4less wrote: »

There are no direct taxes on gifts in the UK.

Can cause issues with CGT, IHT and deliberate disposal of assets.

My understanding of the issues are:

Capital Gains Tax:
If its her main (only) home there will be no CGT on the gift to you, but you'll be liable for CGT on any increase in value (less any allowances) from now until you sell it.

IHT:
Unless she pays a fair rent (market rate) then it will be deemed a gift with reservation for IHT Purposes and form part of her estate when she passes away. On top of this if you then sold it you could also be liable for CGT on top. Any rent she pays will be subject to income tax.

Deprivision of assets:
I think from a benefits point of view if your mum needed to go into a home and tried to claim benefits she would be considered as having deprived herself of an asset and would not be entitled to anything.

I think the govt have pretty much closed any loopholes that allow old people to keep their homes and pass it on without tax but I was wondering whether there was any milage in the SAM (shared appreciation mortgage) approach. You loan your parent at x and have a charge on the property for y% plus say 75% of any increase in value but don't charge any interest? I don't know how this would play out in terms of tax but it might be a way round the existing rules?

poppysarah

What does she want to achieve?

Does she want a smaller house (sell it and buy a smaller one)
Does she want to give you money? (sell it, buy a smaller one and give you money)

Oldboy_3

thanks for all the info. no care home issues at mo luckily - fit as a fidle. just that father passed away recently and its a big house for one. not happy with idea to down size - too many memories etc. wants to stay but it will be too much for her to maintain alone. my idea was maybe i could 'own' the house and therefore be responcible to maintain it and she just lives there for free. as i dont own my own home - currently house provided with work, but mums place would suit me one day, so happy to invest in its upkeep. but clearly dont want to lose out later on. could i buy it from her cheaply? she could move out temp wise if required - deal done then move back in as my guest! my house my guest no fees/charges to her???

Cannon_Fodder

Your mother's solicitor would rightly be concerned that in the event of an unforeseen family fued, she could end up without a roof over her head in her dotage. No decent solicitor would allow their client to be put in that position.

How about buying half ? Gives her some money to enjoy retirement, and shares upkeep.

'Joint tenants', first to die passes their half to the other, perhaps ?

RabbitMad

Alos if you are provide accomodation with work you would probably not have any cgt issue on selling as this would be your primary residence

mally54

could someone advise me how to post a question. Must be missing something somewhere but can't see how i do it?

thanks M