Can A Friend Give Her House To Her Son?

xylophone

Gift to donee in joint occupation - these seem relevant?http://www.elderlycarelaw.com/archives/74

http://www.hmrc.gov.uk/manuals/ihtmanual/ihtm14332.htm

In any case IHT might not be a consideration if there is a late spouse's allowance to use. http://www.hmrc.gov.uk/inheritancetax/intro/transfer-threshold.htm

However, deprivation of assets could certainly be a consideration

http://www.ageuk.org.uk/home-and-care/care-homes/deprivation-of-assets-in-the-means-test-for-care-home-provision/

HAMISH_MCTAVISH

WoodruffsDad wrote: »

She wants to gift the house now but to continue living in it with her son who is happy with this arrangement.

Can she do this legally?

Yes.

However it is possible there are better options, such as family trusts.

This will put the house into trust and prevent it from being subject to claims if the son becomes bankrupt, gets divorced, etc. While also incidentally keeping it out of the hands of claimants such as councils for care home fees.

The important thing as far as deprivation of assets is concerned is that whatever structure to ownership is used, it must not be set up with the deliberate intent of sheltering the property from claims against the asset by the council/HMRC. That doesn't mean it cannot also do that, just that there has to be another legitimate reason for why the trust or transfer of ownership was set up.

So for example, if someone sets up a trust in their 70's and puts their house in it a year or two before they become ill, it'll look suspiciously like depriving the council of the asset was the main reason for doing so.

But if someone sets up a trust in their 50's or 60's and goes on to live happily for another decade or two, it shouldn't be a problem.

Particularly if the main reasons for setting up the trust were things like bypassing probate (which they allow you to do), ensuring continuity of residence for a child (which they also allow you to do), protecting the homeowner from undue influence to change their will regarding who the house is left to (which again they allow you to do), etc.

The fact that they also preserve assets for the heirs is just a happy coincidence, and as far as I know there hasn't been a council yet that has successfully won a case for deprivation of assets where a family trust was set up professionally, early (ie at least 7-10 years before care was needed) and for other legitimate reasons.

Slinky

I wish there was a 'sticky' about attempts to give a house to somebody else. This question appears at least weekly on this forum from people having a 'bright idea'.

LandyAndy

misslaila45 wrote: »

By kindergarten and grade school, children are socializing more with each other are developing preference and are increasingly picking friends of their own.

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