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Transferring property ownership to son - advice please

Werdnal
Werdnal Forumite Posts: 3,780
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Hi All,

Not sure if this is correct forum for this query, so apologies if in the wrong place.

We are a family of 3 - myself (56), husband (60) and our son (23 and only child).  We current share the family home, which is mortgage-free and detached.  Attached to the side of the house is a 2 storey barn, which is currently used as a store/games room, and we have offered this to our son to convert into a self-contacted annexe, as he will never be able to afford to rent or buy in the current climate.  He is willing to plough his savings into this and I am sure we will also chip in along the way.  However, we are keen to secure both his and our future here regarding ownership and rights to occupy.  

We would obviously need to remain in occupation of the main house, until both of us pass on or have to go into care.  Son will then inherit the house and has no siblings to share it with.  However, if either of us need funded care, the main house would be taken into account if it is still in our ownership, may have to be sold and would then leave our son potentially homeless.  We are therefore looking into the best options to transfer or share ownership of the entire property with our son, to ensure his future here, and still preserve our rights to remain.  We are not trying to avoid any tax liabilities and will pay whatever is required to legally achieve this, but also want to take the best route so we don't leave him liable for costs after we are gone.  We know this is a complex situation, and we are also aware that transferring ownership to son will also open any prospective partner/spouse of his to a possible claim against the property value, should their relationship break down.

We have contacted a solicitor who has advised we need advise from a financial advisor/tax accountant first, to understand the best options and implications for this arrangement, before they can draw up any change to deeds and our wills.  I have tried to contact a few accountants and yet to get replies due to the bank holiday weekend.  In the meantime, I know this is a potential minefield, but can anyone explain in simple terms, whether what we want to achieve is even possible, and if so, what options we need to look into for the best outcomes for all of us.  

Thank you in advance :)
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Comments

  • user1977
    user1977 Forumite Posts: 11,776
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    First practical issue - do you need planning permission to create the self-contained annexe? And if so, is that likely to be forthcoming, and would it allow it to be split off independently from the current house ("self-contained" suggests that's what you're seeking)?
  • Werdnal
    Werdnal Forumite Posts: 3,780
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    user1977 said:
    First practical issue - do you need planning permission to create the self-contained annexe? And if so, is that likely to be forthcoming, and would it allow it to be split off independently from the current house ("self-contained" suggests that's what you're seeking)?
    Yes, we also need to look into that, but even if we create a self-contained space, with a separate entity for council tax etc, we would still want to protect our son's future here - the barn is attached to the main house, shares access, garden and is surrounded by our land. 
  • user1977
    user1977 Forumite Posts: 11,776
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    I was mainly thinking of that because it might make things "cleaner" if you can actually separate the properties into independently-owned ones (even if they share some bits), and have less need to worry about the implications of cross-generational ownership (or one generation not having ownership at all).
  • Keep_pedalling
    Keep_pedalling Forumite Posts: 14,850
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    Frankly the idea giving you home to your son is nuts and would almost certainly be treated as deliberate deprivation of assets. 
  • housebuyer143
    housebuyer143 Forumite Posts: 2,607
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    Frankly the idea giving you home to your son is nuts and would almost certainly be treated as deliberate deprivation of assets. 
    Really? Highly doubt that seeing as people do this all the time and the OP doesn't sound like they are about to go into a care home.
  • Sea_Shell
    Sea_Shell Forumite Posts: 8,884
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    So, your Son is currently 23 and single, with no children of his own... yet?

    What's the longer term plan here?     

    What happens in, say, 10 years time, when he's possibly married with children of his own, and they need/want a bigger house?

    What would stop him selling up "your" house to pay for it?
    What if they divorce?
    Or he predeceases both of you?
    How's it going, AKA, Nutwatch? - 12 month spends to date = 3.35% of current retirement "pot" (as at end September 2023)
  • Keep_pedalling
    Keep_pedalling Forumite Posts: 14,850
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    Frankly the idea giving you home to your son is nuts and would almost certainly be treated as deliberate deprivation of assets. 
    Really? Highly doubt that seeing as people do this all the time and the OP doesn't sound like they are about to go into a care home.
    Very few people give they home away and those that do have usually not thought about the potential consequences of doing so. You go from someone who has the security of your own home to being a tenant who could lose their home because their child runs into serious financial difficulty, predeceases their parents, gets divorced or simply falls out with then and evicts them from their own home. This is why the idea is just plain dumb.

    Gifting him the barn to make a separate home seems like a reasonable idea, the rest of the plan is not. The actual risks of all the equity in their home being used up in care costs is exceedingly low. If one of them goes into care then the house is disregarded and the problem then is, if you don’t have other assets to cover it, you are in the hands of the LA of when you get it funded and who and where it is provided. The reforms that are coming in later this year also mean tat the amount of money self funders pay will reduce significantly.

    https://www.gov.uk/government/publications/build-back-better-our-plan-for-health-and-social-care/adult-social-care-charging-reform-further-details#:~:text=On%207%20September%202021%2C%20government,for%20local%20authority%20financial%20support.

    The better option, and one that is totally free of any claim of DOA is for the couple to split the tenancy and leave their share to their son with a life interest to the spouse. This will protect at least half the house from care costs and protect a least half the house in the case of the widowed spouse remarrying. 
  • Grumpelstiltskin
    Grumpelstiltskin Forumite Posts: 3,902
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    Surely you are jumping the gun here. What if the council refuse planning permission outright?

    I think you need at least outline permission before you know whether it is viable.

    If you go down to the woods today you better not go alone.
  • martinbuckley
    martinbuckley Forumite Posts: 1,712
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    I believe that anyone going into care doesnt have the value of the house taken into consideration if the spouse or another adult aged over 60 lives there permanently.  As you are 56 and 60, as long as both of you dont go into care, then the other one will still be living there.
  • Werdnal
    Werdnal Forumite Posts: 3,780
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    Sea_Shell said:
    So, your Son is currently 23 and single, with no children of his own... yet?

    What's the longer term plan here?     

    What happens in, say, 10 years time, when he's possibly married with children of his own, and they need/want a bigger house?

    What would stop him selling up "your" house to pay for it?
    What if they divorce?
    Or he predeceases both of you?
    This is why we are seeking legal advice on the best way to do this to secure our occupancy here for our lifetime ... but before the solicitor can draw up the legal side of things, we need to research the tax implications, hence my questions.  
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