Mum wants to gift her house to me

paul2louise

Mum is on her own, she has been talking to friends and has said that wants to transfer her house to me so that it wont be used to pay for her if has to go into a care home. She is well enough at the moment but her close friend has got very poorly and needs to be take into full time care. I have tried to google it but i dont even know if its a thing people do, what is involved. She says she is going to make an appointment with a solicitor. I own my own house with my husband. Our mortgage is paid off. 
Thank you

McKneff

She just can't just transfer her house to you in order to avoid care fees.

Google Deprivation of Assetts, that explains why. 

njkmr

But there are ways around it.
We did it with my mothers house.
It used to be so many years elapsing before it became safely transferred (7 or 11 years i think ) but im not sure of the exact details now.
Others may advise.

Keep_pedalling

It would be extreamly foolish for her to do this. For starters this would be deliberate deprivation of assets (Google it). Secondly even if the LA did not apply that she would be at risk of not getting care until she was sufficiently decrepit to have funding approved and could end up in over my dead body grange instead of a care home of her choosing.

If she did this she risks her long time security in the event that you die before she dies, you run into financial difficulty or get divorced. 

From your point of view you would face an unnecessary CGT liability when the house was eventually sold and if you don’t currently own a house you will loose your first time buyers status and will pay additional SDLT when you do buy a home.

You really should discourage her from doing this.

paul2louise

njkmr said:

But there are ways around it.
We did it with my mothers house.
It used to be so many years elapsing before it became safely transferred (7 or 11 years i think ) but im not sure of the exact details now.
Others may advise.

Yes i think she mentioned something like 7 years which is why she wants to do it now while she is still well enough

itsthelittlethings

If you ever need to claim benefits I think this could be an issue for you as you’ll be treated as having capital.

GrumpyDil

There are so many reasons why this is not a good idea. For inheritance tax purposes if your mother keeps living there it will still be subject to inheritance tax (although of course that is subject to the overall estate size). As you won't be living there any increase in value will be subject to capital gains tax and there is no specific time limit to how far the council can look back in terms of assessing deprivation of assets.

Ignoring that do you really want you mother living in whatever care home the council will fund when she could use the house to pay for a care home she likes. 

paul2louise

Keep_pedalling said:

It would be extreamly foolish for her to do this. For starters this would be deliberate deprivation of assets (Google it). Secondly even if the LA did not apply that she would be at risk of not getting care until she was sufficiently decrepit to have funding approved and could end up in over my dead body grange instead of a care home of her choosing.

If she did this she risks her long time security in the event that you die before she dies, you run into financial difficulty or get divorced. 

From your point of view you would face an unnecessary CGT liability when the house was eventually sold and if you don’t currently own a house you will loose your first time buyers status and will pay additional SDLT when you do buy a home.

You really should discourage her from doing this.

ok but i am not sure why her friends have told her that is what they have done. She is fit and well at the moment so wouldnt need care at any point just yet. 

paul2louise

itsthelittlethings said:

If you ever need to claim benefits I think this could be an issue for you as you’ll be treated as having capital.

my husband earns too much for me to claim benefits

Keep_pedalling

paul2louise said:

njkmr said:

But there are ways around it.
We did it with my mothers house.
It used to be so many years elapsing before it became safely transferred (7 or 11 years i think ) but im not sure of the exact details now.
Others may advise.

Yes i think she mentioned something like 7 years which is why she wants to do it now while she is still well enough

7 years is the time it takes for a gift falls out of their estate for IHT purposes and nothing to do with deprivation of assets which does not have any time limitations. In the case of giving your home away but continuing living there it does not even apply to IHT as it would be classed as a gift with reservation of benefit.

itsthelittlethings

paul2louise said:

itsthelittlethings said:

If you ever need to claim benefits I think this could be an issue for you as you’ll be treated as having capital.

my husband earns too much for me to claim benefits

You can’t say you will never need to claim benefits - he could lose his job. Personally I think it’s too risky even without the other problems.