Passing on a Property

calvin190

Hi,

My mum has asked me to look into the process of signing her flat over to me and my brother and I'm just looking for a little advice because she's still in the process of paying the mortgage off so I don't know if that complicates the matter.

I'd also just like to find some help with the process. As far as I can tell, you just fill in the TP1 form (I'm also not sure if we fill in the "transfer of whole of registered title" form, or fill in two "transfer of part of registered title" forms) off the government website and send it back to the land registry with the fee but this seems disconcertingly simple to me so I think I've probably missed a few steps...

Thanks!

mrginge

What is the reason for this transfer?
What is the value?
Is the mortgage to be fully redeemed before transfer?

amnblog

Have you not had legal advice on this?

stator

The lender won't let you transfer the ownership until the mortgage is paid off.

Get financial/tax/legal advice before you proceed.

ACG

If there is a Mortgage you can not just transfer all or part of a property.

Putting that to one side for the moment, if the reason is to avoid it being used for care fees for example then you need to be careful. It could be seen as disposing of assets and the council come after the property anyway.

You could also find there are vairous taxes (capital gains and potentially IHT down the line).

You really do need to be getting professional advice from a solicitor and accountant/tax specialist.

calvin190

Thanks for the advice
I am actually getting legal advice this week, so was just wondering what the general process involves.

Fortunately, we aren't looking to sell it for care costs or anything. My mum is just interested in passing it on to me and my brother to avoid IHT.

I'm not sure of the value but it's around £300,000 I think.

Nick_C

Have you looked at the advice on the government web site?

If a person passed on their home to their children (or someone else) before they died, it’s treated as a gift and the 7-year rule applies.

But if they continued to live in it rent-free, their estate has to pay Inheritance Tax on the home even if they lived for 7 years after giving it away. This is known as a ‘gift with reservation of benefit’.

But anyway, inheritance tax only kicks in if your mum's entire estate is over £325K, and from [STRIKE]2016[/STRIKE] 2020 this will increase to £500K.

See https://www.gov.uk/inheritance-tax/overview

and http://www.telegraph.co.uk/finance/personalfinance/how-budget-affect-me/11722864/Budget-2015-How-inheritance-tax-changes-might-affect-you.html

getmore4less

calvin190 wrote: »

. My mum is just interested in passing it on to me and my brother to avoid IHT.

If she lives in the place then avoiding IHT requires more than just signing it over.

somethingcorporate

Fortunately for taxpayers it isn't that easy to escape!