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Tranfer of 50% equity of home to my son
Mani0208888
Posts: 15 Forumite
Good afternoon everyone I would like to transfer 50% of my home to my son. My home is worth £650000.00 it is also mortgage free how I would go about doing this. Would I need a local firm to do this and what costs would be involved?
Any advice would be very much appreciated thanks.
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Comments
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I would think you need to involve a solicitor at the very least. And ask your son if he wants this as well. If nothing else it may well mean he would lose his FTB status should he wish to purchase something else.
Why do you want to do this BTW? It won't necessarily help you avoid IHT or having to sell the place should you need support from the council for your care.I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe, Old Style Money Saving and Pensions boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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Why might you want to do this? It places you at risk if he divorces, gets into debt or you just fall out.
If you've have not made a mistake, you've made nothing2 -
Can I ask why and check it's not to do with having to pay for care in the future etc as that will cause all kinds of issues.1
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I understand your concerns but I have discussed this with my son and we both agree this is what I want. Should I contact a solicitor?
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Given the large sums and potential pitfalls involved it would seem foolish not to.Mani0208888 said:I understand your concerns but I have discussed this with my son and we both agree this is what I want. Should I contact a solicitor?
Also what does he want - this could impact on his future too, it may not be as straightforward as ... he's going to get it all when I die anyway.1 -
I don't understand why anyone would do a transfer of equity like this instead of just making him a beneficiary of your will.
So many cons as others have listed (divorce, debt charged on the estate, loss of FTB status and benefits (HTB schemes and stamp duty), potential deprivation of asset claims to deal with, etc). Whether you are able to live in the house forever is no longer fully in your control.
For what benefit compared to just putting him on your will? Oftentimes these questions are musings of an attempt to deprive assets for future care assessment...
However, if you are determined to proceed, it should be a very simple job with a solicitor and a TR1 form.Know what you don't3 -
Have you discussed with him the 3% SDLT charge he will have to pay if he buys another house? Or the CGT liability that he will have if he does not live in it as his main residence?
Basically, is he happy to live with mum for the rest of her life? Otherwise this will cost him a lot. Even if you've not got a spouse, deceased spouse's allowances, it may not be a good idea financially.If you've have not made a mistake, you've made nothing1 -
He already owns his housewould he still need to pay 3% SDLT?
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2 things spring to mind with this idea
1) if you son ends up in any financial difficulty where his assets could be bought into it as a solution then the house may need to be sold
2) if you son is married and he ends up getting divorced maybe his wife would end up with a 25% state in your home
Just 2 quick thoughts4 -
Yes 3% additional SDLT would be due. Edit - Only if £ is being paid for the share, if a gift, this is not applicable.Mani0208888 said:He already owns his housewould he still need to pay 3% SDLT?
Upon sale of the property in the future, capital gains tax would be due at 18% (or 28% if a higher rate tax payer) of the increase in value, minus CGT personal allowance.
Not a wise financial decision overall - I would strongly suggest you research all the implications of this decision before proceeding.2
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