Change Of Ownership

alvinboobar

Hi, my mother who is 81 is thinking of transfering her house into myself and my sisters name. My mother lives in rented accomodation and the house is empty and up for sale. Would she need to go through a solicitor or can she do it herself through the land registry, I have read conflicting reports on this topic.

Cheers Alan

anselld

What is the point if it is up for sale? Or are you and sister planning to hang on to it?

alvinboobar

She wants us to have the proceeds of the sale

McKneff

Google 'Deprivation of Assets'

What happens if she needs to go into Social Care, needs benefits.

Its not as easy as just signing it over to you, I'm afraid.

anselld

alvinboobar wrote: »

She wants us to have the proceeds of the sale

Then she can just give you the proceeds. What is the perceived benefit of changing ownership prior to sale?

alvinboobar

Could she give us the proceeeds or would she be restricted by the capital gains tax

anselld

alvinboobar wrote: »

Could she give us the proceeeds or would she be restricted by the capital gains tax

Any CGT liability is the same if she gives you the house or the money, it makes no difference.

Is there a CGT liability then? Was it not recently her main residence?

xylophone

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4020890
Whether the house or the cash there would still be a "deprivation' question if she were to need care and wanted to claim benefits.

alvinboobar

The house has been for sale for 2 years and is up for £75,000.

anselld

If it was previously her main residence then the final 3 years of ownership plus all the time she was resident is free from any CGT liability. CGT is unlikely to be an issue.

Deprivation of assets is only an issue if she ever intends to claim benefits.

IHT may be a consideration.

Change of ownership at this point would have a very marginal effect in both cases.
CGT - Any liability would be crystallised at the point of transfer at market rate. Any future liability (between transfer date and future sale would become yours and your sisters)

IHT - The transfer value would become a potentially exempt transfer and become exempt from IHT if your mother survives 7 years. But this is only relevant if the estate exceeds the IHT threshold.

Deprivation of assets: Change of ownership makes no difference, and it only becomes an issue if there is a need to claim benefits.

Overall, it seems of very little benefit to change ownership. I would think better to focus on getting it sold and find out why that is not happening ( price, condition, marketing, etc)

alvinboobar

Cheers everyone