Advice living in father home but my house

Gemmajade

Hi

I am writing to you for a little advice. I have lived in my property for 21 years and have paid all bills, maintenance work and every thing and any thing to do with the property. The problem is, is the house is in my fathers names. My father bought this property for me and lives at a alternative address. He has no say in anything and does not want any. My father is now 93 years old and has been to the doctors and they have said he has his full faculties. Sadly, I know my father will not be around forever and I just want to know where this leaves me in this property?

kazwookie

Gemmajade wrote: »

Hi

I am writing to you for a little advice. I have lived in my property for 21 years and have paid all bills, maintenance work and every thing and any thing to do with the property. The problem is, is the house is in my fathers names. My father bought this property for me and lives at a alternative address. He has no say in anything and does not want any. My father is now 93 years old and has been to the doctors and they have said he has his full faculties. Sadly, I know my father will not be around forever and I just want to know where this leaves me in this property?

Have you asked your father? is he able to tell you?

Does he has a will for when the time comes, if so I guess what that says will be how it leaves you.

00ec25

does your father live in the UK?

is your mother still alive?

do you have any siblings?

have you asked your father if he has made a will and if he has who has he left his possessions to?

your father is the legal owner of the property you live in. Yes you may have paid the bills, and yes you could try and claim a beneficial interest in it, but it is much simpler if you just inherit the property as normal when he dies.

TBagpuss

Do you know whether your father has made a will? if so, then he may have left the property to you.
If not, do you have any siblings, and is your father still married?

While your father is still around, he could transfer the property to you (he is likely to incur CGT if he does)

In a worst case scenario, if he leaves the property to someone else or if you are one of a number of beneficiaries, you might be able to make a claim on the property, - by way of a TOLATA claim, arguing that there was a joint intention between you and your dad that it was your house, and that you have.

However, such claims are expensive and time consuming, it would be much better if your dad either makes a will to ensure that the house comes to you, or that he transfers it to you now.
He (and you) should each get advice about the best way to do it. It might be best if he were to add you to the deeds so you own as joint tenants, which would then mean the house automatically becomes yours n his death.

AdrianC

The fact you've lived there for 21 years makes no difference. He is your landlord. He can just sign the property over to you as a gift, or he can leave it you in his will.

If you are his only child, and he has no living spouse, then everything will be yours on his passing even if he doesn't have a will and dies intestate. If you have siblings, then everything will be split evenly. If he has a living spouse, whether your mother or not, then they come first in the intestacy queue. If he has at least two properties, it's quite likely inheritance tax will need to be paid.

If he gives you the property now, the value will taper for IHT purposes over the next six tax years.

If he gives you the property now, the value will almost certainly continue to be regarded as part of his assets for any assessment for future care costs.

Gemmajade

Hi thanks so much for getting back. I think I am in the will but I will check. If I am not then if my father was to sign the house over to me ASAP would I incur taxes? Thanks

Gemmajade

Hi sorry I did not read the previous email properly . One more question, if my dad added me to the deeds or transferred the property to my name , what fees eould I be charged ? Thanks

Thrugelmir

Gemmajade wrote: »

If I am not then if my father was to sign the house over to me ASAP would I incur taxes?

The property forms part of your father estate. Depending on what else he owns there may well a tax liability to settle, irrespective as to whether he gifts it or not.

Gemmajade

Ok thanks will look further into this with my father

Tom99

If the father makes a gift now would there not be a large CGT bill for the father now, since it was bought at least 21 years ago and it will only drop out of IHT after 7 years.

If left in a will there would be no CGT but maybe IHT.

bowlhead99

Gemmajade wrote: »

Hi thanks so much for getting back. I think I am in the will but I will check. If I am not then if my father was to sign the house over to me ASAP would I incur taxes? Thanks

If he gives it to you ASAP as a gift (rather than you paying an arm's length fair price for it) then because you are related to each other, for capital gains taxes he will make a gain based on its current market value if he had sold it on the market at its fair price (rather than saying he got £0 for it and made a loss...).

In that sense, *you* would not incur taxes; but he likely would, if it had gone up in value since he bought it, which no doubt over 20+ years it will have done.

If he keeps it and still owns it when he dies there is no 'disposal' so no capital gains taxes to pay.

But if he still owns it when he dies then it will be part of his estate for inheritance tax purposes and if the estate is large enough there might need to be inheritance tax paid out of the estate; meaning it or some of the other assets might need to be sold to pay the tax depending on what other cash will be left knocking around the estate.

Of course, depending on his other assets, there might not be any inheritance tax to pay because his estate might all be under the threshold before IHT is charged: e.g., personal nil rate band, any remaining unused portion of a deceased spouse's nil rate band, additional nil rate band for a property that he himself lives in and passes to his kids or grandkids, and so on. If there's no IHT going to be payable there is no point incurring a capital gains charge by gifting it away.

Whereas if all of it would fall to be charged at 40% inheritance tax rates, it could be worth trying to get it out of the estate (by giving it away now and hoping he lives until 100+) and then the CGT which gets applied is only at CGT rates which are lower than IHT rates, and only on the gain rather than the full value.