Parent terminal illness and gifting house

Hi,
My Dad has been diagnosed with cancer that is terminal and has less than 6 months. He wants to make his estate as easy to hand over as possible as his Dad's estate wasn't easy to deal with. My Dad suggested giving me the house now and he pays rent which is something that his friend did with a similar illness. There won't be any IHT to pay whatever happens as he's below the threshold. What would be the pro's and con's of doing this? One big pro is being able to sell the house after death and not wait for probate I believe? But have been told capital gains tax could be owed as it would be a second home? Any advice would be helpful before I have the big chat with him. 
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  • Mojisola
    Mojisola Posts: 35,551
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    Will you be the only beneficiary of his estate?

  • xylophone
    xylophone Posts: 44,139
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    Even if you are the sole beneficiary, it seems to me to be wiser to leave the property in your father's name.

    He might like to consider making you the joint holder on all non-ISA accounts which will give you access to cash to deal with matters arising after your father's death.

    If the house and  ISAs are the only assets in  this non IHT liable estate when he passes, obtaining probate should present few problems?
  • Your father’s estate sounds straight forward, so the only advantage to doing this is to speed up the house sale. Their is a slight risk of CGT but the value of the house would need to rise by over £12,300 between the gift and the sale to be a problem. That risk can be reduced if you became joint tenants rather than you taking on full ownership.

    if you do this forget about him paying rent. That is only necessary to avoid a gift with reservation of benefit, which is only appropriate where the giver has a IHT issue and are likely to live at least 7 years. Any rent he paid you would also be subject to income tax. 
  • getmore4less
    getmore4less Posts: 46,882
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    There is an advantage of not being joint owner.
     if no-one is living in the place no council tax upto probate grant  and 6 months after.
  • Savvy_Sue
    Savvy_Sue Posts: 45,936
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    I think I'd start from considering why your grandfather's estate was hard to deal with, and what could be done to make his easier WITHOUT giving you his house, which can have pitfalls. 

    Does he have an up-to-date will, which accurately reflects his wishes? Are you sole executor and beneficiary? Has he thought about what he'd want to happen if - unlikely as it may seem - you die before him? And if you're not sole beneficiary, if any of the others died before him? 

    And do you know what his wishes are for his funeral? At the very least, cremation or burial? If burial, where? 
    Signature removed for peace of mind
  • Thank you everyone for your help, some really useful comments.
    I was leaning towards leaving it in his name anyway for simplicity and I think your comments have kept me in that position. I agree the probate should be fairly straight forward too so leaving it to probate should be fine. 

    To answer the questions:
    He does have a will but I haven't seen it or asked details on it, it was completed a few months ago so it's up to date. He told me that I will get everything but worth checking sole executor and beneficiary of course. 
    I need to ask about funeral. 
    I believe he just found taking on my Grandad's estate slightly difficult because of his sudden death. So finding bank accounts etc. was probably not easy. But still worth checking why in more detail though.

    Thanks again.
  • Mojisola
    Mojisola Posts: 35,551
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    idcool said:
    He does have a will but I haven't seen it or asked details on it, it was completed a few months ago so it's up to date. He told me that I will get everything but worth checking sole executor and beneficiary of course. 
    I need to ask about funeral. 
    I believe he just found taking on my Grandad's estate slightly difficult because of his sudden death. So finding bank accounts etc. was probably not easy. But still worth checking why in more detail though.
    If you are the executor, he really should tell you.  If the executors are solicitors, that would be worth changing.
    It would be useful now to get him to list all the accounts he has, any insurance policies and pensions, as well as all the utility firms, etc. 
    He doesn't need to show the list to you if he wants to keep it private for now but that would make it so much easier to sort out the estate.
  • Slinky
    Slinky Posts: 9,910
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    Sorry to hear about your Dad's diagnosis.
    When we had a similar situation with my Dad, I wrote on his behalf, and he signed, letters closing most of his bank accounts so we could move his cash into one account so that there would be less admin after he'd passed away.
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  • idcool
    idcool Posts: 8
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    Thanks. Just read up on what the executor does and you are right I need to find out and will change if needed.
    I know he is preparing for me all his accounts etc. so hopefully it will be easy to sort them out. 
  • Mojisola
    Mojisola Posts: 35,551
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    Slinky said:
    When we had a similar situation with my Dad, I wrote on his behalf, and he signed, letters closing most of his bank accounts so we could move his cash into one account so that there would be less admin after he'd passed away.
    We reduced the accounts Dad had as well - just make sure that you don't end up with more money in one account than the organisation will release without probate (if you wouldn't otherwise need probate).
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