Inheritance Tax / putting part of home in children’s names.

DJ23

Hello, now house prices have gone up considerably where I live I’m now in the IT bracket. A few yrs ago it would have been unthinkable I would be over the limit.

I have 2 sons (both in their 30’s) living at home with me. Is putting part of my home in their names as well as mine a good idea? Or is gifting part of it better to do?

xylophone

By putting part of the house in the names of your sons you are making a gift.

See

https://www.taxinsider.co.uk/living-with-mum-and-dad-the-family-home-and-iht-ta

[Deleted User]

DJ23 said:

Hello, now house prices have gone up considerably where I live I’m now in the IT bracket. A few yrs ago it would have been unthinkable I would be over the limit.

I have 2 sons (both in their 30’s) living at home with me. Is putting part of my home in their names as well as mine a good idea? Or is gifting part of it better to do?

Because you are still living in it the gift, because that is what it is, will be a gift with reservation in that you will continue to benefit from it. It will still, therefore, form part of your estate. 

As if it never happened for IHT!

elsien

You would also be depriving them of the benefit of any first time buyer schemes as and when they are ready to buy their own place. 

[Deleted User]

DJ23 said:

Hello, now house prices have gone up considerably where I live I’m now in the IT bracket. A few yrs ago it would have been unthinkable I would be over the limit.

I have 2 sons (both in their 30’s) living at home with me. Is putting part of my home in their names as well as mine a good idea? Or is gifting part of it better to do?

How much is your estate worth currently. What is your marital status?

penners324

Terrible idea.

They'll no longer get SDLT relief as 1st time buyers, it'll still be considered for IHT and Care home costs (could be seen as deprivation of assets by the council).

Probably capital gains tax to pay when it's sold....

Keep_pedalling

Frankly it is a very silly idea.

You don’t say what your marital status is but if you are single or divorced you have an exemption of £500k, but If you are widowed then you can double that.

How much is your house worth and how much have you in other assets?

InMyDreams

[Deleted User] said:

Because you are still living in it the gift, because that is what it is, will be a gift with reservation in that you will continue to benefit from it. It will still, therefore, form part of your estate. 

As if it never happened for IHT!

I believe that’s not necessarily the case as the sons are also living there.

(Not that I’m saying it’s a good idea, but I don’t believe it would be a gift with reservation if the mother just gave, say, half away to the sons.)

Keep_pedalling

InMyDreams said:

[Deleted User] said:

Because you are still living in it the gift, because that is what it is, will be a gift with reservation in that you will continue to benefit from it. It will still, therefore, form part of your estate. 

As if it never happened for IHT!

I believe that’s not necessarily the case as the sons are also living there.

(Not that I’m saying it’s a good idea, but I don’t believe it would be a gift with reservation if the mother just gave, say, half away to the sons.)

That is correct, but it all falls apart if they move out in the next 7 years.

msb1234

Along  with what along with what others have said, if either son were to marry, then subsequently divorce, their share of your house could be taken into account in the financial sharing. 

DJ23

Need to do something so no IT to pay.