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Parents signing over house
chelseablue
Posts: 3,303 Forumite
This subject came about because my parents elderly neighbour has recently had to go into a care home as he is no longer able to live alone.
As he owns his house his family are having to sell it to pay the fees.
My Mum was saying how she really doesn't want that to happen to her house and was wondering if they were able to sign ownership of their house over to my brother and I.
Can this be done? How much does it cost to do? Are there any taxes we would need to pay now and in the future?
For information their mortgage is paid off and if they did sign it over they would just carry on living in it as they do now
As he owns his house his family are having to sell it to pay the fees.
My Mum was saying how she really doesn't want that to happen to her house and was wondering if they were able to sign ownership of their house over to my brother and I.
Can this be done? How much does it cost to do? Are there any taxes we would need to pay now and in the future?
For information their mortgage is paid off and if they did sign it over they would just carry on living in it as they do now
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Comments
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It can be done but it is likey to be classed as deliberate deprivation of assets.
Lots of other previous posts about this issue.0 -
This would be classed as deprivation of assets, and it could still need to be sold to pay any care costs. Even if you did get away with it would you really want her to have little or choice in what care home she could go to?
It would also be classed as a gift with reservation, so if IHT is also an issue then it would still form part of her estate.
If as is likely she never needs care then you could be hit with capital gains tax when you do come to sell it.0 -
If your parents require care or means tested benefits in the future then signing over the property to you and your brother would be deliberate deprivation of assets.
The property would always be liable for IHT (if it's over the threshold) and you and your brother would be liable for CGT. Double tax whammy.
Who do your parents think should pay for their care in their old age if not themselves?0 -
Me and you pixie
and bob down the road, not dave in Westminster though... 0 -
The problem is that if you do this, say, 1 month before your mother requires care, the state will just see through this and take the house anyway - google 'deprivation of assets', there's plenty of info out there.
If the house appreciates in value significantly between you taking ownership, and disposing of the property there will be a CGT bill. How much depends on a lot of variables.
If no bank is involved you can theoretically do it yourself, although I would imagine if you are giving away your primary asset, anyone would want to seek legal advice, and I would recommend your mother does the same.0 -
If your parents require care or means tested benefits in the future then signing over the property to you and your brother would be deliberate deprecation of assets.
The property would always be liable for IHT (if it's over the threshold) and you and your brother would be liable for CGT. Double tax whammy.
Who do your parents think should pay for their care in their old age if not themselves?
Good point! Me and my brother probably :rotfl:
Hopefully they would never need a care home. I would like to look after them as long as I can, like my Mum did for my Nan.
My Nan lived alone until she was 82 and never went into a home.0 -
Thank you all.
My parents are in their 50's, still working, in good health so for example if they signed it over tomorrow it could be 30 years before they need any care.0 -
chelseablue wrote: »Good point! Me and my brother probably :rotfl:
Hopefully they would never need a care home. I would like to look after them as long as I can, like my Mum did for my Nan.
My Nan lived alone until she was 82 and never went into a home.
The practicalities of this (and the demands of any possible conditions - not that I would wish it upon anyone) may make this impossible0 -
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Worst case. What would happen if you and your brother died before your mum? Would the people who inherited the house from you continue to let her live there or would they want to move her out? This is really a bad idea for your mum to do this.0
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