Signing House Over To Children

AnotherJoe

andy9 wrote: »

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 !!!

There's no "probably" about it. Its a really terrible idea.

What was your motivation??

xylophone

You can put property into a trust but have the right to remain in it,

The OP is proposing a parental settlement (bare trust) for his unmarried minor children and it would be settlor interested to boot?

It would be a gift with reservation of benefit for IHT purposes unless he paid his children a market rent - this would be their income but taxable on him ( so would have paid income tax when he earned the money and income tax when he received the rent on behalf of his children)? - I've no idea (this being his PPR) whether in these particular circumstances he would create any CGT liability.

All in all, this proposal seems fraught with potential problems and pitfalls.

https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem4300

need_an_answer

lookstraightahead wrote: »

Is it to do with avoiding care home fees?

The OP is a single parent,I suspect that the motive may be linked to ensuring a new partner doesn't benefit from something that he feels was part of a previous relationship that included his children and wanting to protect an asset for them.

But its all speculation until the OP actually answers the question of why?

TBagpuss

OP, as others have said, this is a really, really bad idea.

If you want to ensure that the house (or it's value) ultimately goes to the childrne there are other things you can do:
- make sure that you have an up to date will, prepared by a proper solicitor.
- If you start a new relationship, have a cohabiation agreement drawn yup and make sure that you review it regualarly and that any agreements you may have in future aboutyour partner's contributions to the house are suitaby documented.
- If you think about getting married again, consider having a pre-nuptial agreement.

If you want to provide finacially for your children, don't forget to manage your own finaces dfirst, including making sure that you have appropriate pension and savings arrangemetns in case your situation changes, but then consider putting money inbto savignsd or investments for the childnre directly, out of any surplus income you have.

Or, if you prefer, kep savings in your name whioch gives you the flexibility to gift them to the childnre later if you want, but also allows you to use them if you need to, or to delay hding them over if you feel the children are not mature enough when they turn 18.

sleepyjones

Can you not just write a will and have the kids as sole inheritors?

You'll have piece of mind that if anything happens down the road and it doesn't 'cause any problems with the kids in the meantime.

andy9

Thanks for all the advice folks.


My original idea was to ensure that the children receive 100% of the value of the property without paying IHT, or any care home fees if it comes to that, and also preventing any future partner from financially benefitting from the property.


Although getting easier as the children get older... being a single parent with a full time job is hard going and I don't want all my hard work to be wasted.


From all your comments, I can now see there are far better ways to go about doing this, so thanks again

Slithery

andy9 wrote: »

My original idea was to ensure that the children receive 100% of the value of the property without paying IHT, or any care home fees if it comes to that

So who do you think should pay them? Or are you expecting the tax-payers to fund your children's inheritance.

Mojisola

andy9 wrote: »

My original idea was to ensure that the children receive 100% of the value of the property without paying IHT, or any care home fees

Honestly, if you are one of the few who needs residential care, you will be glad that you have assets to pay for the home of your choice.

G_M

andy9 wrote: »

My original idea was to ensure that the children receive 100% of the value of the property without paying IHT, or any care home fees if it comes to that, and also preventing any future partner from financially benefitting from the property.

The first two objectives would fail.


As you'd still be living in the house, HMRC would consider this a 'Gift with Reservation' and the value of the house would be included in your Estate for IHT.


Likewise the Local Authority would consider it 'Deprivation of Assets' and include it in their means assessment for free Care home fees.


If you re-marry, I assume you'd be fully commiting to your spouse....
If you were subsequently to divorce, I imagine the court would take into account the fact that you had brought the property to the marriage, as well as the needs of the children to remain in their home, when drawing up the divorce settlement .

MysteryMan00

andy9 wrote: »

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 !!!

There are two types of people in this world, Andy:


1) Those whose decisions benefit from more thinking by them; and
2) Those whose decisions do not benefit from more thinking by them


You might want to consider which one of these types you are.