Putting kids on house deeds

CLAPTON

zenshi wrote: »

I live by myself and the kids will get the house when I pop off anyway. A friend of mine was recently killed in an accident and I'm trying to think ahead it would be one less thing they had to worry about!

If your children are on the deeds of the house (i.e. part owners) but they do not actually live there, you do realise that if the property is ever sold they will be liable to capital gains tax.

Basically a very bad idea unless there are very special circumstamces.

zenshi

I have a will but was written when they were minors! Updating it is on my 'to do' list

zenshi

CLAPTON wrote: »

If your children are on the deeds of the house (i.e. part owners) but they do not actually live there, you do realise that if the property is ever sold they will be liable to capital gains tax.

Basically a very bad idea unless there are very special circumstamces.

No I didn't. As said in my opening post, I know nothing hence the questions

They do sort off live here......my son is in the Forces and daughter at uni, so this is still 'home' right now

CKhalvashi

zenshi wrote: »

I have a will but was written when they were minors! Updating it is on my 'to do' list

Mine's done the minute my circumstances change.

Now, it's not that often, but it was at one point!

CK

CLAPTON

zenshi wrote: »

No I didn't. As said in my opening post, I know nothing hence the questions

They do sort off live here......my son is in the Forces and daughter at uni, so this is still 'home' right now

the context is that a person's principal private residence (PPR) is exempt from cgt; this is why most people never think about it when selling their home.

However to be a PPR one actually has to live there or the equivalent (being in the forces would qualify).

However, if your offspring move out whether or not they actually buy something else then their share of the property would cease to be exempt.
There are certain reliefs available but it could cost a lot if, in the future, you wanted to downsize or simply move elsewhere or they sell after you die.

So unless there are specific plus points then I would suggest you think very carefully about such a decision.

Of course it may make their lives directly more difficult;
they wouldn't be first time buyers when they come to buy their own property, there would be affordability issues about having two mortgages, if life got difficult and they divorced/die etc part of your house would form part of their estate etc .

JimmyTheWig

zenshi wrote: »

If they did get on the mortgage, they then wouldn't be able to have a mortgage if they wanted to buy their own property?

As kingstreet says, it wouldn't stop them getting a mortgage per-se, but in reality it would in terms of how much the banks would be happy to lend them (unless they were very high earners).
Also it would mean that you would all be linked in terms of your credit files. So if one of your children didn't pay a credit card bill on time then it would mean you would find it harder to get good credit in the future.

zenshi wrote: »

They do sort off live here......my son is in the Forces and daughter at uni, so this is still 'home' right now

It is home right now, but may not be in 5 years time. Seems a bit of a faff to make this change now and then reverse the change when they move out. And if you expect them to move out before they would receive their inherritance (how's that for beating around the bush!) then it would all have been in vein anyway.

zenshi wrote: »

I have a will but was written when they were minors! Updating it is on my 'to do' list

Spend the time and effort doing this rather than changing the house deeds.

zenshi

Thanks Clapton, very informative and given me a lot to think about

Radiantsoul

I agree with the above that a will is probably the best way.

I guess one option would be to appoint somone(say a solicitor) as the executor. That would cost a lot more, but it would reduce their hassle in selling the property.

tyllwyd

Also ... if you make your kids part-owners of your house now, they are both relatively young. What happens if they meet someone, get married, and then get divorced or die before you do and that other person acquires part-ownership of your house? You could be opening the way to a lot of problems in the future - much better just to get a proper will written!

CLAPTON

Radiantsoul wrote: »

I agree with the above that a will is probably the best way.

I guess one option would be to appoint somone(say a solicitor) as the executor. That would cost a lot more, but it would reduce their hassle in selling the property.

if the circumstances are simple.. a father wants his children to everything equally then having a a solitors as executor would simply
-costs a lot
-double the timescale for getting probate
-treble the hassle factor

must better to let the children be executors and they can if they wish always use a solicitor