Signing over house

bury_2

Can anybody tell me if the scenario is legal: Mother signs a house over to the daughter ( 100% owned). Daughter then uses the deeds to re-mortgage and uses the money to buy a place for the mother ( also in the daughters name).The mother would have a clause in the legal documents saying that she has the right to stay in the house as long as she lives.Are there any legal issues such as stamp duty on the signed over house or inhertiance issues?. Can the Gov say that they want the stamp duty on the first house even though it was signed over?.Thanks

Debt_Free_Chick

Yes - there are potential legal & tax issues with every stage of what is proposed.

Firstly, the transfer may well incur a stamp duty charge. And a potential IHT charge, if the mother does not survive for 7 years.

Assuming the daughter lives in that house, then the purchase of the second property, in her name, gives a potential CGT charge whenever it's sold or otherwise disposed of.

The clause giving the mother the right to occupy the second property has tax implications too. (Gift with reservation).

And the entire process would be open to scrutiny, if mum ever needed residential care.

Anyone proposing anything like this kind of transaction needs specialist advice - from a solicitor and/or tax adviser.

Jonbvn

As DFC says, there are several tax issues to consider. In addition, I think that stamp duty may also be payable.

bury_2

ThanksI thought there would be some issues. How dare people think they can give there own money away!.Would the right to remain in the second house be a gift with reservation as this house was never owned by the mother?. Not inhertiance tax issues as under threshold. No wories about the CGT as own other houses so know all about that.The care home issue - Mother only in her 50's, so could they go back 15 - 20 years?

mightymouse

hi

You have presented an interesting and forward thinking scenario which makes me wonder why you would go to this trouble.

It has difficulties for example if you died (pre-decease your mum)or divorced.

Bankruptsy or mortgage arrears could eventually result in it being sold.

you might make a will but this could be challenged by family members with beneficiaries or amounts changed (vague on purpose because you would need advice)

If you have bought the property what has your mum given you for that right to stay in her lifetime.(I know its the other house) but you are trying to show there is no link.

What if mum changes her mind as she gets older and finally she would need seperate representation to go through with this.

I wonder how old are you and could the reason behind this transfer be resolved easier with mum still in control.

You do not actually say whether or not it is YOUR mum but I have presumed this to be so.

bury_2

It has difficulties for example if you died (pre-decease your mum)or divorced.
I would make a will the same time the house got signed over.Have no intention of getting married , even in the unlikley event that's why we put the clause in about staying in the house for life.
Bankruptsy or mortgage arrears could eventually result in it being sold.
Very unlikley to go bankrupt. Have no debts , only buy what I can afford etc - very tight! lol.Mortgage arrears - why the house has been paid for by cash agasin't the other property.
you might make a will but this could be challenged by family members with beneficiaries or amounts changed (vague on purpose because you would need advice)
No other members , Just me and mum.
If you have bought the property what has your mum given you for that right to stay in her lifetime.(I know its the other house) but you are trying to show there is no link.

Why can't I buy my mum a house?. I am fairly wealthy in my own right.I could put a hefty deposit down if I wanted and pay her mortgage and live rent free in the other house.What if mum changes her mind as she gets older and finally she would need seperate representation to go through with this.
I concerned about this as well, but she offered. Said I am getting left everything so might as well get it sorted now.
I wonder how old are you and could the reason behind this transfer be resolved easier with mum still in control.
In my late 20's. It just seems easier to sort it out now as this is the last house she wants to buy and I want her current house.
You do not actually say whether or not it is YOUR mum but I have presumed this to be so.[/quote]
correct

mightymouse

Hi

I was thinking of your mortgage arrears whichever the mortgage will still be looking at your equity.

I think its game set and match to you.

wecanhelpu

So basically, bury, you want to kick your mother out of her house so you can live there , buy another house and you want to know the cheapest way of doing it.

Correct?