signing over house to children

ladyinteal

I know this must have been asked about before, but as rules etc change rapidly can anyone let me know what the latest rules are about the possibility of signing over a house to children to avoid having to sell it for care costs?

Browntoa

Same rules still apply , read up on deprivation of assets


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


And Gifting a house is subject to the 7 year tax rule

http://citywire.co.uk/money/can-i-give-away-my-home-to-avoid-inheritance-tax/a589586

Keep_pedalling

If you need care, will you really want little choice of where you go because you have no assets to pay for a higher standard of care, and have to take whatever is available based on the maximum amount a LA is willing to pay.

missbiggles1

Of course, you have to trust that your children (or their spouses) won't kick you out or that you won't lose your home in a divorce or bankruptcy.

System

If you give it away long before you reach old age, and move out so thet you no longer benefit from it, you will be fine.
But why?

mania112

If the person who needs care is married this avoids the house being used as a test of usable assets to cover care costs.

Keep_pedalling

Browntoa wrote: »

Same rules still apply , read up on deprivation of assets


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


And Gifting a house is subject to the 7 year tax rule

http://citywire.co.uk/money/can-i-give-away-my-home-to-avoid-inheritance-tax/a589586

Potencial exemption through 7 year tax rule will only work if after giving it away they pay their children a fair market rent to keep living there, otherwise the house falls back into their estate on the second parents death.

tigerspill

And their children who now own the house will have to pay income tax on the notional rents at market rate. And if living rent free I believe this is treated as a benefit for tax reasons?

missbiggles1

Clifford_Pope wrote: »

If you give it away long before you reach old age, and move out so thet you no longer benefit from it, you will be fine.
But why?

That may work for tax purposes (not my field) but it wouldn't work for assessing care home finance.

Mojisola

tigerspill wrote: »

And their children who now own the house will have to pay income tax on the notional rents at market rate.

And Capital Gains Tax when the house is eventually sold.

xylophone

http://www.theguardian.com/money/2014/aug/28/tenancy-common-care-home-fee-solution

may be of interest.