Signing over house from elderly relation

timmyt

funkey_monkey wrote: »

Hi,

My aunt has decided to leave me her house in her will. Her solicitor has told her to sign it over to me now and then rent it back from me in order to avoid losing it if she was to go into a nursing home in old age.

Will this leave me exposed to paying tax on the rent she would pay and would the rent be a nominal amount or must it be market value?

Is there any other way this property could be signed over to me without incurring any income taxes?

bad legal advice, bad bad bad. That is exactly what the Council can set aside/treat her as still owning it, unless you are doing it for another genuine reason - which you clearly are not. market rent to

avoid IHT sure, and yes you will pay income tax on rent, and own a second property paying outgoings and possibly capital; gaisn tax over time.

get a better estate tax planning lawyer.

puddy

so a question then, what if she signed the house over etc etc, forget the IHT and then CGT, but then she needs nursing care or whatever and the council decree that she still has the assett although she signed it over. would that mean that she wouldnt get care, would they honestly leave her to her own devices? surely if she is at risk and needs care they would still accommodate her?

ILW

jenner wrote: »

so a question then, what if she signed the house over etc etc, forget the IHT and then CGT, but then she needs nursing care or whatever and the council decree that she still has the assett although she signed it over. would that mean that she wouldnt get care, would they honestly leave her to her own devices? surely if she is at risk and needs care they would still accommodate her?

They could put a charge on the house.

Fire_Fox

jenner wrote: »

so a question then, what if she signed the house over etc etc, forget the IHT and then CGT, but then she needs nursing care or whatever and the council decree that she still has the assett although she signed it over. would that mean that she wouldnt get care, would they honestly leave her to her own devices? surely if she is at risk and needs care they would still accommodate her?

What if I claimed Jobseekers allowance but never actually attended any interviews I was offered. Would the DWP leave me to my own devices if they found out? You bet they would and rightly so.

Fire_Fox

ILW wrote: »

They could put a charge on the house.

Not if she had signed it over they couldn't!

jockosjungle

Ok so you honestly believe that the day before someone goes into a care home they can transfer their house and give someone all their savings and the taxpayer is then stuck with the bill?

You might wish to add some of your own legal fees to the costs

R

ILW

Fire_Fox wrote: »

Not if she had signed it over they couldn't!

It could be deemed an illegal transaction, as with bankruptsy.

SouthCoast

A recent thread on the debt boards appeared to indicate that the local authority were going for a charging order on a property that may have been involved in deprivation of assets.

funkey_monkey

Okay, I've done some more reading on this before i speak to a solicitor.

My understanding is, and correct me if this is incorrect:

1. Property was gifted to me with a reservation. Therefore she can live in it rent free all her days.
2. Therefore there is no income tax to pay as no rent will be forthcoming.
3. Inheritance tax may be null if the total value of her estate is less than the current nil rate threshold - £325,000
4. She has signed the property over to me whilst in good health and has no illnesses or reason to believe she will require care. However the deprivation of assets requires further analysis.
5. CGT applies only if I decide to sell the property and the gains is calculated from the time of death until selling date.
6. If I decide to rent it out after thier death, I am liable to income taxes.

ILW

You could just buy it off her.