Buying or signing over a property to someone else

MrChocolat

Yes that's right. 

macman

If you give him the money, there is no obligation for him to buy a house-he can do what he wants with the cash.
If you are going to live in the same house, then you become merely a lodger, if you pay rent, or a guest, if you don't, with no right of tenure-he can ask you to leave without notice.
Is that really a situation you want to be in?
Why don't you simply purchase a property as joint tenants? Upon your demise, the whole property passes solely to him, regardless of your will, or the laws of intestacy.

davidmcn

MrChocolat said:

By the way if he did have to pay inheritance tax, does that mean he'd have to sell the property? 

Perhaps. We don't know what else is likely to be in your estate, what else he's going to inherit, and whether the amounts would even make Inheritance Tax relevant.

Bear in mind that if you're living in the house (presumably rent-free) then I think it may constitute a "gift with reservation" i.e. it would be assumed to still be part of your estate for Inheritance Tax purposes given you're still benefiting from it as if it's your own house.

macman

MrChocolat said:

By the way if he did have to pay inheritance tax, does that mean he'd have to sell the property? 

He doesn't have to pay any inheritance tax. IHT is paid by the estate.

greatcrested

MrChocolat said:

I am going to live with him. 

That would almost certainly then be a 'Gift with Reservation' so would fall fully within your Estate for Inheritance Tax and the 7 year cut off would not apply.

This is because it's not a real gift - you are retaining a benefit.

It would also probably be considerd 'Deprivation of Assets' by the local authority when assessing whether you are eligible for means tested care.

They would expect the property to be sold to pay for your care privately, or they might pay but put a Charge on the poperty so that whenever it is sold in the future they can claw back that money.

macman

As above, if you don't pay a commercial rent then it's clearly a Gift with Reservation and will fall into the estate for IHT purposes.
A suggestion: if you've got enough spare cash to buy your son a house outright, then you can afford to (indeed, you can't afford not to) see a solicitor with a view to doing some proper estate planning. Not relying on what some random people tell you for free on an internet forum.

AdrianC

MrChocolat said:

I am going to live with him. 

Oh, it's actually just another tax scam, not really a very, very generous gift.

MrChocolat

AdrianC said:

MrChocolat said:

I am going to live with him. 

Oh, it's actually just another tax scam, not really a very, very generous gift.

Thank you for your speedy assessment of my situation. But perhaps I should clarify a few things. 

My other son used to live with me. He died recently, at home. I cannot continue living where I am so I have sold my place. My son who I want to leave a property to, cannot work, and I have been supporting him but soon I will no longer be able to continue doing so as my savings are running out. That's why the plan is for me to kill 2 birds with 1 stone by buying a property for both of us so that I won't have to fork out as much for him and he'll still have a place to live and so will I. And the last thing I want is for the taxman, who I don't give two !!!!!! about, to !!!!!! things up for my son in the future. 

Please feel free to offer more feedback. 

JGB1955

So.. why don't you buy somewhere... let your son live with you for free...leave him the house in your will?  Am I missing something?

Slithery

Why not just buy your own property and let your son live with you?