Property Ownership with the Children

sabelu

My wife and I are selling our current property and purchasing our final property. It crossed my mind that it would be good at this point for many reasons to share the ownership 51% my wife and I and 49% between the three children. I see this as an opportunity to tidy up our affairs etc for the future and should we need care in the future. 
Is this a good opportunity or should we get settled in our new property and then do a similar carve up through the Land Registry?

p00hsticks

Under the current legislation it's generally not considered a good idea, and you usually aren't really doing you or your children any favours by doing so,. If they don't live with you then the children would become liable to pay CGT when the property is eventually sold, and it would count as an asset of theirs in the event of bancruptcy or divorce. If they don't already own property it would also preclude them from any FTB schemes going, and result in them having to pay the higher rate of SDLT when they do buy. 

Assuming that you and your wife are over 60, then the value of the property in whcih you both live is ignored if either of you had to go into care, which is something that - despite the fear over it - is still only happens to a minority of th elderly, and then generally for a relatively short period. And there is no time limit to the 'deprivation of assets' argument. You've already posted on this board that a primary reason for doing this is to avoid care fees. If the survivor of you or your spouse needed to go into care then unless they can provide any other logical reason to the Local Authority fo doing it this way, it's possible that they could consider that you've done it to deliberately avoid care fees and take the value of the property into account anyway.

There are are additional IHT allowances available if each spouse leaves everything to the other and then to the children, meaning you can have an estate worth £1 million before you have to pay any Inheritance Tax. and unless you pay your children the going market rate for living in the property, then giving it to them would be seen as a 'reservation of benefit' and the whole property would still be included in your estate for IHT purposes anyhow.

Albermarle

What if one ( or more ) of your children want to buy a property of their own and want to sell their share of your house .
The idea seems fraught with potential difficulties and as detailed above may well not bring you the advantages you might hope.

Also I do not see where the care angle comes into it. You would still own 51% of the property to be taken into account by the local council, and as above they might take a dim view of your unusual house owning arrangements.

Brie

If both you and your wife need to go into care then the house will be sold no matter whether your children own a portion or not.  Even if one of them is living there, unless they themselves are at least 60 at that time.  Net result is that one child is made homeless and the other 2 are given tax bills.