Signing House Over To Children

Marvel1

Goodbye first time buyer benefits in the future.

One wants to sell to get their share the other doesn't.

MobileSaver

andy9 wrote: »

I have only a very small mortgage left ( 2 - 3 months ) on the property. I am considering the pros /cons of signing the house over to the children now!

Any thoughts gratefully received

My thoughts are that this is a really bad idea for a whole host of reasons as pointed out by other posters.

steampowered

Please don't do this, it is a really bad idea. There are serious downsides. I see no upside.

Your children would lose all benefits associated with being a first time buyer - e.g. the government bonus on "help to buy" ISAs; access to first time buyer schemes; first time buyer stamp duty relief.

If your children want to move out and buy a property of their own, that would be treated as a second property - meaning your kids will be hit for higher rate stamp duty, costing them tens of thousands.

Once your children have moved out, if you continue living there and the property is later sold, there may be a capital gains tax liability (vs. no capital gains tax if you sell the property as your primary residence).

How are you proposing to continue living in the property?

What you could do instead is make a will, and leave everything to your children in the will. No inheritance tax if the value of your estate is less than £325k.

scottishblondie

Whatever you are trying to achieve here, this is a bad idea.

• Minors can't own property, so it would need to be held in trust for them. Lots of legal hoo-haa.
• If you need state assistance, giving away your house could be viewed as deprivation of assets.
• A disagreement with your children in the future could leave you homeless.
• Difficulties if you want to sell up and move house.
• Loss of FTB status for your children.
• CGT implications for a sale in the future once the kids have moved out.
• If they don't want to make you homeless, difficulty and additional costs for the kids when they want to buy their own homes.

There are bound to be other things as well, but these are the first things that came to mind.

macman

If this is tended to reduce your eventual IHT bill, then you'd need to pay a commercial level of rent to your kids/LL to avoid it being classed as a gift with reservation.
No one can really help you further with this unless you give some context and motive.

gingercordial

All good points above - and what if you want to move house (up- or down-sizing, moving for your job etc)? You won't be able to sell it as you aren't the legal owners.

lisyloo

You can put property into a trust but have the right to remain in it, so it’s perfectly possible to get round the issue of being kicked out.

I’m not saying that’s a good idea, but I am saying that scenario is avoidable.

andy9

All thanks so much for your replies.
I can see I've got many many things to think about!


What I thought may have been a good idea, probably isn't so !!!

lookstraightahead

Is it to do with avoiding care home fees?

xylophone

How small are your children?

Honey, I shrank the kids?:D