Changing ownership of family home, any drawbacks?

justjoan

We are fortunate to have no morgage on our home but I would like to change ownership to remove my name and replace it with my son's name so that he will have joint ownership and If we end up in a carehome they cannot take the home for our up-keep. Does anyone know the drawbacks to doing this? (I trust my son 110%)

hcb42

I dont have experience but the normal drawbacks are "intentional deprivation of assets" which you can google, or IHT - if you make a gift and then die within seven years..

Mojisola

It may also affect his entitlement to means-tested benefits. If he went bankrupt, your house would be part of his assets. If he divorced, your house would be part of any settlement.

justjoan

Thanks for the swift reply and advice.. I'll check that out and try and stay alive for seven years more..lol..Jj

tyllwyd

Also beware of capital gains tax - if your son is not living at the family home, my understanding is that when the time comes to sell, he might be faced with a tax bill to pay.

You need proper legal advice - you will probably find that the potential downsides make it a bad idea.

CLAPTON

I assume you are a couple

and one of you will stay on the deeds plus your son

draw backs

-will count as deliberate deprivation of assets and so may void your primary purpose

- if you wish to move and so sell the property then your son will be liable to pay capital gains tax as he doesn't actually live there and it's only one's primary principal residence is cgt free

-when you die he will be liable to IHT on the full amount of the property as the 'gift' will be seen as one with reservation AND if he sells the property he will be liable for cgt

-if he dies then his half becomes the property of his heirs (wife / children etc) who may force the sale of the property

-if he gets into debt then the creditor could put a charge on the property and try to force the sale

justjoan

The leads to links recommended have been very helpful.
Thank you all who have replied. I now think its not a good idea. So you have saved me a lawyers bill. Most grateful. Good news is the information on joint assets ( now £600,000..ie £300,000 each which I did not know about) means our children will probably not have to pay inheritance tax.