Parents Transferring/Gifting Home to Children

TheJP

Hi all, after some advice/experience on this matter.

My parents (live in NI) own their home mortgage free valued at around £160k. They want to avoid the possibility of paying care fees as they want to leave a legacy to us the 4 children. They have sought legal advice from a solicitor on any implications this could have, they have advised that transferring ownership in 4 equal parts to the children wont be an issue regarding any tax/SDLT and they can live in the house without having to pay any of the 4 children rent.

My other 3 siblings live in NI and i live in England, 3 of us me included own our own properties. My worry was that this could have SDLT second property issues and a worry for the sibling that hasn't bought a house and their FTB status. The solicitor has said this isnt an issue.

My parents on the advice of their solicitor have said this is a gift and wont incur additional taxes etc.

My worry is that the solicitor is not being clear on the potential deprivation of assets issue, my parents believe this is restricted to 6 years after you gift the property to your children. However i don't think there is a timeline on this if they continue living in the house.

Any advice or experience on this would be helpful

Cheers

user1977

Have you actually seen the solicitor's advice? Can you quote it verbatim, I'd rather hope it was more than just saying it "won't be an issue" as I'm sure anybody here can come up with various potential issues (and you've already mentioned some).

TheJP

user1977 said:

Have you actually seen the solicitor's advice? Can you quote it verbatim, I'd rather hope it was more than just saying it "won't be an issue" as I'm sure anybody here can come up with various potential issues (and you've already mentioned some).

Not seen the advice no, my parents raised these Qs to the solicitor who in whatever way has said this wont be an issue. They did say to my parents that the law on these circumstances are different in NI as they are to England.

user1977

TheJP said:

user1977 said:

Have you actually seen the solicitor's advice? Can you quote it verbatim, I'd rather hope it was more than just saying it "won't be an issue" as I'm sure anybody here can come up with various potential issues (and you've already mentioned some).

Not seen the advice no, my parents raised these Qs to the solicitor who in whatever way has said this wont be an issue. They did say to my parents that the law on these circumstances are different in NI as they are to England.

Which laws in particular? I don't think there are any different tax implications for a starter.

LinLui

Quite apart from the deliberate deprivation of assets issue, have your siblings thought through this from the possible angle that your parents will end up in a substandard care home if the need arises. Care homes cost money, and there is very definitely a pecking order. If you are dependant on local authority funding then you will be in the lowest standard of home available. That situation is very unlikely to change. "Your legacy" (assuming that you managed to avoid all the other pitfalls) would be at the cost of them being able to access the best quality of care that they could afford when they most need it. I wouldn't have wished to put my parents in that kind of position. Unless, of course, you are all willing to chip in with money to contribute to ensuring they can access care of a quality that affords them a reasonable amount of comfort over and above the most basic provision.

TheJP

user1977 said:

TheJP said:

user1977 said:

Have you actually seen the solicitor's advice? Can you quote it verbatim, I'd rather hope it was more than just saying it "won't be an issue" as I'm sure anybody here can come up with various potential issues (and you've already mentioned some).

Not seen the advice no, my parents raised these Qs to the solicitor who in whatever way has said this wont be an issue. They did say to my parents that the law on these circumstances are different in NI as they are to England.

Which laws in particular? I don't think there are any different tax implications for a starter.

Again i am going off limited information my parents have passed on to me, they are trusting that the legal advice is sound. I'm not aware what laws the solicitor has referenced when advising my parents.

TheJP

LinLui said:

Quite apart from the deliberate deprivation of assets issue, have your siblings thought through this from the possible angle that your parents will end up in a substandard care home if the need arises. Care homes cost money, and there is very definitely a pecking order. If you are dependant on local authority funding then you will be in the lowest standard of home available. That situation is very unlikely to change. "Your legacy" (assuming that you managed to avoid all the other pitfalls) would be at the cost of them being able to access the best quality of care that they could afford when they most need it. I wouldn't have wished to put my parents in that kind of position. Unless, of course, you are all willing to chip in with money to contribute to ensuring they can access care of a quality that affords them a reasonable amount of comfort over and above the most basic provision.

My parents are old school NI, they worked hard and 'paid into the system' and took noting out and don't want their house to be used to pay for care as they feel the state should pay for this, to a degree i see their point. A lifetime smoker/alcoholic/drug user isnt strip of their assets when they need care. We can argue for many pages on this forum why that is right or wrong. I would say myself and my older sibling would have no issues in using our share to pay for the care however my parents would vote otherwise. Thankfully my older sibling will have POA if/when any decisions need to be made.

If the time comes and i am financially able to then yes i would chip in above my share of the property.

badmemory

I know nothing but.  Deprivation of assets.  House owned by offspring & one gets divorced or dies, charge on parental home.  One needs a care home which not all do, firstly they do not go in a quickly as they may if they are self funding & land in an over my dead body home.  Try visiting a few & check out the differences.

TheJP

I guess further questions i should have added to aid my conversations with my parents is.

1. Will the transfer have any tax implications to those who own a property, their share is 25% equating to roughly £40k?

2. If a parent needs to go into care after they have done the transfer could the house be sold, even if the other parent is living in the property?

3. Is there a time limit on deprivation of assets when a parent transfers a property and remains in the house?

4. Is there a limit on the value of assets that would be taken into consideration for their care?

Thanks

mebu60

Perhaps get a second opinion from a different solicitor yourself! 

p00hsticks

TheJP said:

LinLui said:

Quite apart from the deliberate deprivation of assets issue, have your siblings thought through this from the possible angle that your parents will end up in a substandard care home if the need arises. Care homes cost money, and there is very definitely a pecking order. If you are dependant on local authority funding then you will be in the lowest standard of home available. That situation is very unlikely to change. "Your legacy" (assuming that you managed to avoid all the other pitfalls) would be at the cost of them being able to access the best quality of care that they could afford when they most need it. I wouldn't have wished to put my parents in that kind of position. Unless, of course, you are all willing to chip in with money to contribute to ensuring they can access care of a quality that affords them a reasonable amount of comfort over and above the most basic provision.

My parents are old school NI, they worked hard and 'paid into the system' and took noting out 

neither of them will qualify for a state pension or be putting in a claim for pension credit then ? Perhaps try running figures past them. The majority of people get far more out in state benefits such as pension, child benefit etc than they ever pay in in NI in their lifetime, even before you start reckoning in the cost of the 'free at point of delivery' NHS system.