Transfering house to child

November2

Apologies if this is in the wrong forum, but I've searched the whole site and can't find anything. Can someone please point me in the direction of a thread regarding transferring a property to a child. I live with my parents who are now elderly and they wish to transfer the house into my name. I feel sure Martin must have covered this at some point.

elverson

https://www.saga.co.uk/magazine/money/personal-finance/giving/what-you-need-to-know-about-signing-property-over-to-your-children

The "seven years rule" is one of the important considerations.

AdrianC

There's a million and three threads covering this.

On a practical level, if the property is registered at the Land Registry, and there's no mortgage - then the paperwork is very straightforward.

BUT... your parents are elderly. If they pass away during the seven tax years after the gift, then its value will still be part of their estate for IHT purposes (albeit tapering over that period). If they need residential care, the value may well be taken into account for the purposes of deciding whether they or the LA pays for that care. There may be other tax implications, too, for a gift of that value.

AdrianC

Also, if the OP owns the property, but doesn't live there, he is legally their landlord - with all the implications of that. If the OP ever gets into financial difficulties, the house could be sold and the money distributed to creditors.

DumbMuscle

OP has said he lives with his parents - so CGT will not apply so long as his parents don't have tenancy over any part of the house (e.g. he keeps right of access to their rooms). Not sure how/if that changes the inheritance tax picture.

Ozzuk

As others have hinted at, if your parents need care then you'll want to look into deprivation of assets as you could be liable for significant costs.

Linton

What happens if the child dies first?

theartfullodger

November2 wrote: »

Apologies if this is in the wrong forum, but I've searched the whole site and can't find anything. Can someone please point me in the direction of a thread regarding transferring a property to a child. I live with my parents who are now elderly and they wish to transfer the house into my name. I feel sure Martin must have covered this at some point.

I'd feel much more comfortable advising the parents about this rather than the child: Child might just have a "point of view".....

xylophone

The parents could transfer half of the property to the live in OP - provided that he paid his half of the expenses there would be no need to pay him rent and neither would it be seen as a "gift with reservation"?

https://www.gov.uk/inheritance-tax/passing-on-home


http://www.which.co.uk/elderly-care/financing-care/gifting-assets/343064-legal-transfer-of-property

The transfer of half the home might still be seen as Deprivation of Assets, but if one of the parents were living in the family home while the other required care, the home could be disregarded in the assessment - if the OP were over 60 the home could still be disregarded.

http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS38_Treatment_of_property_in_the_means-test_for_permanent_care_home_provision_fcs.pdf?dtrk=true

http://www.housingcare.org/downloads/kbase/3091.pdf

teddysmum

Why is there a need to transfer the property, (unless they can't afford to pay off the motgage) other than to avoid paying some dues ?


As has been said, the first person to need care does not have the house counted as their assets, but the remaining one would.


If the only offspring (child sounds an odd description for an adult) was in the will, they would get the house anyway, assuming no care costs or cots met from other assets, but some people have been encouraged, even by legal practices, to take over or part own a property to avoid care fees, assuming that seizing the asset would be too difficult.


However, councils are aware of this ploy and being short of money, with more calls on their services, they may well take action to retrieve any money they pay out (That is if they do agree to pay anything because of deprivation of assets).

seashore22

Google deprivation of assets.

Are you seeing this as a way to secure the family home and avoid care fees or is there another good reason to do this?