Transferring Home to Children

JJ2734

Hi,

My parents are looking into transferring their home into the name of my sister and myself.

Primarily this is to avoid any future care home fees. My parents have both worked hard and paid enough NI contributions and it is a disgrace that they have to do this. They should receive free care in their old age if required. Was this not something that David Cameron mentioned at the election campaign but has gone quiet now that he is in power?

Does anyone have any experience of this? There is a lot of out of date information on the web.

Ideally I would like to ensure that we could draw up some kind of lease for life agreement with a solicitor which would enable them to live in the property for the rest of their life. Does such a thing exist?

I am aware of the risks of the property being used as an asset in the event of a divorce or bankruptcy. Would this risk be removed with a lease for life agreement?

Plus would this still stand if both my sister and myself own 50% each - surely it would be impossible to cash the asset in if another party owns 50%.

I would appreciate any advice on the best way to proceed with this that would protect my parents interests.

Thanks

Cook_County

GREAT IDEA! Do it tomorrow. You will increase the amount of CGT payable to HMRC in the future so will subsidise the rest of us.

It will make not a jot of difference to future care cost contributions or IHT so go for it...

noh

JJ2734 wrote: »

Hi,


..................................................
I would appreciate any advice on the best way to proceed with this that would protect my parents interests.

Thanks

The best thing to do to protect your parents interest is to not proceed with your plan.
As Cook_County says it would not make any difference to potential future contributions for care home fees or have any effect on potential IHT. It will bring about a CGT charge on eventual disposal of the house.

The only people such a plan benefits is you and your sister.

Why do you think council taxpayers in your area should subsidise you?

angelpie1000

As the other posters have advised, your suggested course of action would not achieve your aim. Your parents would retain an interest in the property, albeit not still owning it. I'd suggest seeking professional advice from someone local to you, so you can talk about the specifics.

Good luck
AP

jimmo

Age UK, quoting from CRAG 6.062 and 6.064 say
"It would be unreasonable to decide that a resident had disposed of an asset in order to reduce his charge for accommodation when the disposal took place at a time when he was fit and healthy and could not have foreseen the need for a move to residential accommodation."
http://www.ageuk.org.uk/Documents/EN-GB/FS40_deprivation_of_assets_in_the_means_test_for_care_home_provision_fcs.pdf?dtrk=true

noh

jimmo wrote: »

Age UK, quoting from CRAG 6.062 and 6.064 say
"It would be unreasonable to decide that a resident had disposed of an asset in order to reduce his charge for accommodation when the disposal took place at a time when he was fit and healthy and could not have foreseen the need for a move to residential accommodation."
http://www.ageuk.org.uk/Documents/EN-GB/FS40_deprivation_of_assets_in_the_means_test_for_care_home_provision_fcs.pdf?dtrk=true

But would it be reasonable to decide that the asset had been disposed of to reduce the charge for accomodation if the resident states that was the intention as in the original post?

chrismac1

You need professional advice from someone who has specific local knowledge in providing legal arrangements which shelter you from the big care home fees hit. There are a few of those guys locally in my area - Cumbria - so I'd have thought you could find one where you live.

Nosht

An Asset Trust could cover this, see a specialist lawyer to set it up.

N.

solnik

On the same theme, my boss has transferred two properties to two of his children, he did this without professional advice after reading about it in Investors Chronicle. Now our accountant says that he liable for the capital gains tax on the market value of these properties. He thinks that he has no liability as there was no cash exchange. What do the experts think

ceeforcat

HIs accountant is absolutely correct - disposal proceeds would be the market value of the property at the time.

knack

Why should care in old age be free if one has the money to pay for it? Surely this is draining essential funds that could be better spent elsewhere - say maybe on those who dont have the money to pay.