Parents want to do a "House Swap".

AlexLK

Person_one wrote: »

Did you google deprivation of assets?

Why do you think it would be this easy to avoid paying a huge tax bill? It just doesn't work like that!

I haven't but will do, thanks.

Person_one

AlexLK wrote: »

I haven't but will do, thanks.

Have a look here, I've saved you the bother.

http://www.hmrc.gov.uk/inheritancetax/pass-money-property/pass-home-to-children.htm

AlexLK

FatVonD wrote: »

I know somebody who did this, her grandmother sold her a 3 bedroomed London flat for basically the amount she could get as a mortgage (which was probably about a quarter of what it was worth.) The surveyor raised an eyebrow and commented on what a bargain she'd got. :rotfl:

As far as I know her grandmother is still alive and more than 7 years have elapsed so I reckon they're probably home and dry regarding inheritance tax now.

I can see my parents still being alive in seven years time, if that helps.

heartbreak_star wrote: »

Emotionally, Alex, it's another thing they have to lord over you, IMO.

HBS x

I do understand where you are coming from. However, in many ways they are just being kind, they are the type of people who'd try buying their way out of anything.

elsien

If the idea is that you keep the house and pass it down the generations, that's a massive tie on your future life choices.
What if you decide you want to move away, or follow a career elsewhere? Or decide that you don't like the financial compromises you have to make to keep up with the daily living costs? Without the aid of a crystal ball, none of us know what the future holds.
Unless your parents are giving you the house and a free choice, either they have a big hold on you in the future, or you risk a massive fall out if your choices don't tie in with their perceptions of your "agreement."
If it's not a swap without reservations, don't do it.

Edit - if you do swap, you and your wife have to make the changes you need to make it your own. To make it your house and not your parents, without fear of upsetting them. Even if it means tearing the insides out and starting again.

Person_one

AlexLK wrote: »

I can see my parents still being alive in seven years time, if that helps.

At their ages, its impossible to say, and a big gamble.

I'm 29 and I don't even know if I'll be alive this time next week.

The fact that they've essentially given away a huge asset would also be an issue if they ever needed care. They could be assessed as though they still have the house, I believe, and expected to pay accordingly.

Mojisola

AlexLK wrote: »

I think we could, just about if we cut back on spending unnecessarily.

Why would you want to work merely to fund an expensive house?

There's more to life than keeping a house going!

Who would want to be restricted to living and finding work in one area for the whole of their lives? What if you or your OH got an amazing job offer at the other end of the country?

It could become a millstone rather than a house.

FatVonD

I wish someone would give me a million pound millstone!

whitewing

What if your wife had an affair and wanted a divorce?

What if one of you had to stop work, assuming you both work?

Just trying to think of scenarios where your parents did not get the outcome that they are thinking of?

Have you factored maintenance of the house in as well as regular monthly bills?

The other thing is that you could 'grow' into the house. If I got the chance to move into a better house for the same money as now, I am sure that it would slightly change my outlook and perspective on life. It's not a materialistic thing, just an optimistic/lucky feeling that would make other opportunities present themselves.

Also, would your parents want you to put up other family members, eg in the spare room? Or even would they be expecting that one of them comes to live with you when the other passes on?

Mojisola

FatVonD wrote: »

I wish someone would give me a million pound millstone!

Even if you weren't allowed to sell it, had to spend most of your money on its upkeep and felt like you were living in someone else's house all the time?

Add to that, potential parental disapproval every time you tried to change the decor or do any other work in the house?

FatVonD

whitewing wrote: »

What if your wife had an affair and wanted a divorce?

Ooh, good point!