Gifting of property

shepherd82

Hi out there,

I think similar questions have been asked in the past but i'm not sure if my scenario is slightly different.

My grandmother passed away a couple of years ago, leaving her property to my mother. We dealt with probate which was granted and have the confirmation paperwork with the property deeds.

For the last year my wife and myself have been living in the property and my mother has stated that she wishes to gift the property to us so that we don't get hammered with an IHT bill when she passes away as this would probably result in us having to sell up.

We are a bit lost with how the process of transferring the ownership works...

Can anyone help?

specialboy

Is your mother on any means tested benefits? If so she may not be able to just give it away so easily, google 'deprivation of assets'If she doe gift it to you she may have to pay capital gains tax.

Pixie5740

If the property is owned outright and there's no mortgage I think the process is fairly straightforward.

https://www.gov.uk/registering-land-or-property-with-land-registry/transfer-ownership-of-your-property

As special boy says, your mum should look into depravation of assets to see if it applies to her.

It might also be worth your mum looking into Capital Gains Tax to see if it will apply.

shepherd82

Thank you for your responses.

My mum is not on any means tested benefits but I will certainly look into the Capital Gains tax part further.

shepherd82

I think it is all sorted now.

My understanding is that capital gains tax does not apply as my mum does not reside at this address and never has and it is my primary / only residence and I have no intention to move once the transfer is done.

My only concern is that whilst probate has been granted, my mum has not had the property deeds transfered into her name. Will we need to transfer to her name before it can be transferred to mine?

Land_Registry

If you have probate then that gives the executor the power to deal with the legal ownership i.e. the property in this case. As such there should be no need to register her first and she would complete a Transfer in form TR1 as explained in the guidance Pixie5740 has already linked you to

booksurr

shepherd82 wrote: »

I think it is all sorted now.

My understanding is that capital gains tax does not apply as my mum does not reside at this address and never has and it is my primary / only residence and I have no intention to move once the transfer is done.

My only concern is that whilst probate has been granted, my mum has not had the property deeds transfered into her name. Will we need to transfer to her name before it can be transferred to mine?

it is far from sorted

check with a solicitor because what you are proposing is to transfer the property direct to someone who was not named in the will as the beneficiary - your mother was supposed to be the beneficiary, but if the executor transfers direct to you instead then technically the executor should obtain a deed of variation which allows the terms of the will to be amended

you have also misunderstood CGT. You are not (yet) the property owner so you are not liable for CGt at all, the fact it is your "main home" is therefore utterly irrelevant.

Depending on how long ago granny died, her estate could be liable for CGT since (we assume) the property will have increased in value since death. As the property is not owned by a beneficiary, the estate is therefore the CGT liable person, and an estate gets lower CGT allowances than a real person

G_M

shepherd82 wrote: »

My understanding is that capital gains tax does not apply as my mum does not reside at this address and never has and it is my primary / only residence and I have no intention to move once the transfer is done.

It is your grandmother's Estate and/or your mother who may be liable for CGT.

For 2 years (at least) your mother has not used the property as her primary residence, so if she disposes of it (give it to you) the difference in value between when she inherited and disposal date will be liable. Market value is what matters, not the fact she gifts it.

This may not be the case if your mother lived there as her primary residence for the 1st year after inheriting - but you need to check dates and the CGT rules carefully.

Same would apply to grandmother's estate if the estate still owns.

Another_username_2

Qualified legal advice is essential here.

As said, OP does not appear to understand the CGT implications of what is proposed.

In addition, OP writes that grandmother passed away two years ago. A deed of variation must be entered within two years of the relevant death. So, depending on whether that limit has passed, a deed of variation may no longer be possible, or may need to be sorted out swiftly.

As stated above, if a DoV can be organised, the estate would be liable for any CGT; if not, the mother would be, and will continue to be until she gifts the house to OP. Also, remamber that a DoV affects only IHT and CGT - if mother wants to claim any benefits, including social care, either now or in the future, depending on circumstances the house could (but may not necessarily) be regarded as part of her assets.

Hence, qualified legal advice needed.