deed of gift and rent

Lizzey

Hi need some help please, when we go married my husband and I moved in with my widowed mom, we were looking to buy a home of our own but settled into the routine of shift work at moms, 21 years ago mom gave the house to me via a deed of gift as there was a lot of talk in the news on inheritance tax (this is commented on within the deed of gift), mom has just gone into a nursing home as a temporary arrangement from hospital post surgery and I have been approached to agree to top up fees being paid, this is fine and I looked on the website to find out how to go about this. What I did find is that I should have been charging mom rent when her property became mine as it is now a gift with reservations, the solicitor who drew the deed of gift up never mentioned this, ( I was there at the time) or I would have put this into place immediately, what I need to know is how do I back track now and as mom will be coming back home how do I put the right things in place for the future with regard to the rent, I think that the house will be back in moms estate now and want to protect the future of all of us, thanks all in advance, if I've missed out any obvious details to help with answers please let me know

Bluebirdman_of_Alcathays

You can't change history. You can start charging rent to your mother, this should have the effect of taking the property out of her estate. But, it needs to be a market level rent - otherwise she is still enjoying the gift! You will then of course need to pay income tax on that rent. You need to go and see an accountant - people on the internet can only make best estimates based on the details you've given.


How much is her estate worth? With the new property allowance, you need to effectively have an estate over £1m to pay IHT, so she may not need to do anything.

Mojisola

Lizzey wrote: »

21 years ago mom gave the house to me via a deed of gift as there was a lot of talk in the news on inheritance tax

What I did find is that I should have been charging mom rent when her property became mine as it is now a gift with reservations

First thing to do is check whether her estate is likely to be liable to inheritance tax.

Lizzey

Thank you for the reply, I have been worried to death since I read the information. I was thinking of going to see the solicitors who drew with original deed of gift up for some advice. Our house is worth maybe in the region of £200,000 at most, my worry is that it may not be my house now and I've been under the impression that it was held in my name since the deed of gift 30th May 1996

Mojisola

Lizzey wrote: »

Thank you for the reply, I have been worried to death since I read the information. I was thinking of going to see the solicitors who drew with original deed of gift up for some advice. Our house is worth maybe in the region of £200,000 at most, my worry is that it may not be my house now and I've been under the impression that it was held in my name since the deed of gift 30th May 1996

Why not? Whose name is on the deeds?

Lizzey

My mom, who is still a sharp as ever, tells me my name is on the deeds and these are held at our solicitors, I was worried that because I haven't charged rent the house goes back to my moms estate

Bluebirdman_of_Alcathays

If your name is on the deeds, it is your house. Nothing can change that.

Mojisola

Lizzey wrote: »

My mom, who is still a sharp as ever, tells me my name is on the deeds and these are held at our solicitors, I was worried that because I haven't charged rent the house goes back to my moms estate

If your name is on the deeds, you are the owner.

Even if your mother's estate was liable for inheritance, it wouldn't mean that the house went back into her ownership - you would still be the owner.

As the property isn't registered at the Land Registry, it would be worth doing a voluntary registration now rather than waiting until the house is to be sold in the future.

martindow

If continuing nursing home care is needed, the local authority could see this transfer of the house as contrived and want you to pay the fees from its value once your mum's other savings are used up.

I hope all goes well well with your mum but temporary spells in a nursing home can sometimes end up lasting much longer than anticipated.

Mojisola

Lizzey wrote: »

21 years ago mom gave the house to me via a deed of gift as there was a lot of talk in the news on inheritance tax (this is commented on within the deed of gift)

martindow wrote: »

If continuing nursing home care is needed, the local authority could see this transfer of the house as contrived and want you to pay the fees from its value once your mum's other savings are used up.

I hope all goes well well with your mum but temporary spells in a nursing home can sometimes end up lasting much longer than anticipated.

I think the LA would have problems claiming this was deprivation of capital - it happened so long ago and there was a clear reason for doing it.

Trying to prove that the intention was really to avoid care home costs would be practically impossible.

Bluebirdman_of_Alcathays

martindow wrote: »

If continuing nursing home care is needed, the local authority could see this transfer of the house as contrived and want you to pay the fees from its value once your mum's other savings are used up.

Contrived?! They did it 21 years ago, long before the state even had the ability to take assets to pay for care fees. Talk about unnecessary scaremongering!