Changing house deeds to children

macman

The main consideration here is that your mum will then have no security of tenure whatsoever. Unless she pays a commercial rent after transfer, it will be a gift with reservation, so will still form part of her estate for IHT purposes, if that is the motivation.
If you do want to so it, foolish though it would be, it's a very simple matter of completing the relevant forms and sending them to the LR-no solicitor is required. 

FARREKL

I'm in England. 
It creates a CGT liability, based on value at time of transfer,  if it's a 2nd property, unless you actually pay the market price of the property, "consideration" on transfer
Also, if mum has to go into a care home/needs council care at home within 7 years, the transfer may be challenged and overturned.
Also, need to prove that market rent is paid, to avoid overturn.

scottiescott

FARREKL said:

I'm in England. 
It creates a CGT liability, based on value at time of transfer,  if it's a 2nd property, unless you actually pay the market price of the property, "consideration" on transfer
Also, if mum has to go into a care home/needs council care at home within 7 years, the transfer may be challenged and overturned.
Also, need to prove that market rent is paid, to avoid overturn.

Might be different in England but the "7 years rule" is a myth regarding liability to pay for care.

Browntoa

7 year rule is for tax on cash gifts

Deprivation of assets has no time limitations , the council only need to prove that , in their opinion, the transfer was to avoid care home fees at the time it was made. At age 85 there is absolutely no chance it would not be successfully challenged

IvanOpinion

Just remember that if the children end up getting divorced then you might find the ex-SIL/DIL coming after their share of the house.  This is exactly what happened an aunt of mine who changed the house into her children's names.

DairyQueen

Why on earth do so many elderly people believe that gifting their home to their children benefits any of the parties? (rhetorical). The only possible motive is the mistaken belief that they can avoid paying care home fees.

There was a fairly recent case on this forum where a poster's father-in-law was demanding the return of the portion of his home that he had 'gifted' to his daughter several years prior. The daughter had sadly predeceased her father and only then had the poster been made aware that he now owned part of the old gent's home as he was the sole beneficiary of his wife's estate.

Complications with CGT, IHT and loss of first-time-buyer status; impact on government benefits; risk of the property passing to an unintended recipient on the death or divorce of the recipient; pursuit of the asset by the LA. The list of issues is long.

The elderly person could be dispossessed of his/her home at the most vulnerable time of life. What caring child would encourage their parent taking such a risk?

TELLIT01

DairyQueen said:

Why on earth do so many elderly people believe that gifting their home to their children benefits any of the parties? (rhetorical). The only possible motive is the mistaken belief that they can avoid paying care home fees.

That's not the only possible motive.  It can also be done to avoid or reduce CGT liability.  As others have said though, the risk in so doing are great and unless there are legal safeguards in place there is a risk of losing the use of the property too.

Keep_pedalling

TELLIT01 said:

DairyQueen said:

Why on earth do so many elderly people believe that gifting their home to their children benefits any of the parties? (rhetorical). The only possible motive is the mistaken belief that they can avoid paying care home fees.

That's not the only possible motive.  It can also be done to avoid or reduce CGT liability.  As others have said though, the risk in so doing are great and unless there are legal safeguards in place there is a risk of losing the use of the property too.

CGT does not apply to your home, so how would gifting it help? Gifting your house is likely to lead to an eventual CG for the receiver of the gift when the house is eventually sold. Worst case situation is the double whammy of CGT on top of IHT.

Yellowvest23

https://www.which.co.uk/later-life-care/financing-care/gifting-assets-and-property/gifting-assets-what-are-the-rules-alp865l0wlum

It has nothing to do with age,its solely if the gifter was in need of a care home at the time of the gift,explained perfectly in the Which guidline above.

Yellowvest23

McKneff said:

Yellowvest23 said:

Keep_pedalling said:

It would be an exceedingly dumb thing to do. Confirmation is a fairly straight forward thing for a simple estate, and this will be considered deliberate deprivation of assets if she ever dies need residential care.

Her security will be at risk if either you or your sibling got into financial trouble, got divorces or died before she does.

It would not be considered deliberate deprivation of assets if she is not in need of residential care at the time of transfer.

Oh it certainly does. The DWP can and do dig back years

It has nothing to do with DWP,its the local council who have to decide weather the house was gifted when the gifter was in need of a care/nursing home.
Yes the council can go back years and if they see the gifter needed a care home when the gift was made they would have a claim.They cant just say you were going to get older so at some point may need a care home otherwise that would aply to any and everyone.The onus is on them to prove a care home was needed WHEN the gift was made.