Gifting land

BigMacDaddy

Hi, 
a quick question. With all the lockdown thing going on and my parents being vulnerable, we decided to move in with them and help them through these strange times. My mother has early stages of dementia and dad was in for an operation for a hernia but out of hospital now and on the mend. They live in a 4 bedroom bungalow and they have a 2 bedroom annexe which has seen better days but livable. Myself, my wife and 2 young boys all moved in from a rented accommodation to help them out but now that things are easing off a little we don't want to be under the same roof and dad said about giving us the plot of land the annexe is on, knocking it down and building on it. My question is, what's the best way of doing this so? Would we have to buy it, could they gift it to us or what? We want to do it the cheapest way possible and avoid paying the taxman for something they've already paid tax for. My wife is a nurse and I'm a teacher at a private school, which unfortunately won't be opening again until next summer, so getting a mortgage for a 3 bedroom house is near enough impossible for us at the moment! Any advice would be much appreciated, thanks in advance.

Browntoa

It's an asset.

If either of them needs care then the council would declare it as "deprivation of assets" if it's gifted . They can value the estate as if it's still theirs . 

You would need to pay a market value for the land 

getmore4less

How will you fund the build?

Would them having the 2 bed and you in the 4 bed not work?

Whats the property worth now? 

MoneySeeker1

Are you an only child - or do you have one or more siblings? (bearing in mind future problems there will be if you do that).

BigMacDaddy

I'm an only child. I was thinking that we might have to purchase the land but my dad says it's pretty stupid as all he does is drink tea and watches old war movies! His reply was "What am I going to do with the money?" 
He says he'll just take it out in dribs and drabs and give it back to us over a period of time. He doesn't like the idea of him working all his life, paying tax, then being forced into a expensive care home, having all his assets and home taken away, then when those funds are depleted, get shoved in a crappy government care home waiting to die. He said he worked hard for what he has and wants to give it to the grandchildren! All that aside, what's the average cost of a bit of land these days?

lincroft1710

Before you go down this route, speak to your local planning department. They may not approve of a new dwelling being created on separately owned land.  Or they may want to impose a condition on the new dwelling that it can't be sold separately from your parents' bungalow.

Oh and the cost of a "bit of land"? You could be looking at £100,000 or more if it has residential planning permission

AdrianC

BigMacDaddy said:

His reply was "What am I going to do with the money?" 
He says he'll just take it out in dribs and drabs and give it back to us over a period of time. He doesn't like the idea of him working all his life, paying tax, then being forced into a expensive care home, having all his assets and home taken away, then when those funds are depleted, get shoved in a crappy government care home waiting to die. He said he worked hard for what he has and wants to give it to the grandchildren!

So what's he going to do if he does need residential care? Thelma and Louise...?
And don't say "But I'll look after him/them" - unless you know what somebody in late-stage dementia is like...

Investigating people for deprivation of assets is basically the local authority saying "No, the council tax payers of your area are NOT going to subsidise your inheritance". Of course, once he needs a care home, that house won't be his home any longer, because he won't be able to live there any longer. And they aren't "taken away" - he is simply paying for the accommodation and care that he needs.

If he doesn't need care, then whatever assets he has left will pass to you through his estate after his death.

Mrh1019

Just in terms of the deprivation of assets and the ‘crappy government care home’ firstly your dad appears to currently be in good health other than the hernia? He may never need a care home and if he does it could be years away? If your mother needed a care home the value of the property would not be taken in to account if your dad lives there? Also to point out that privately funded and government funded care homes are often the same homes! X

ArchtiectBOX

Hi,

I have PMd you as had a similar issue recently. 

Thanks,

AB

greatcrested

To separate the properties into 2 Titles:

* consent from existing lender if any

* planning consent (& Building Regs)

* access (for utilities, people, cars etc)

:

If you pay market value

* you pay SDLT as well

* parents may pay CGT (not sure but I think so as the annexe is not their main residence)

If gifted:

* deprivation of assets (eg if care needed in future)

* 7 year rule on Inheritance tax

* no SDLT

gulliblej

Gifting land abroad

My Nan wants to gift her land in the West indies to her grandsons, can she just write a letter to that effect and have it witnessed? Or do we need to employ solicitors here and over there to do it?  Worried its going to be really costly for the boys, they're only young.

Any advice is greatly appreciated

Thanks

Jay