Parents Transferring/Gifting Home to Children

SDLT_Geek

TheJP said:

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

The sibling who would otherwise have qualified as a first time buyer for stamp duty land tax purposes, would no longer qualify as a FTB for SDLT purposes if buying in England or Northern Ireland.  They might also be liable to the 3% extra SDLT if, by the time they buy, the 1/4 share is worth £40,000 or more.

Keep_pedalling

This is an utterly stupid thing to do. Apart from the deprivation of assets issue, their long term security is threatened by one of their children going bankrupt, getting divorced or dying.

There is a more sensible option, and that is to make wills containing immediate post death interest trusts which would but the share of the first to die into trust with the survivor becoming a life tenant in that share. That has none of the downsides of giving your home away but protects 50% of the asset being lost to care costs or remarriage. 

Grumpy_chap

Nothing has changed since the OP last asked this question.
https://forums.moneysavingexpert.com/discussion/6401820/parents-house-and-care-fees#latest

I don't imagine that there will be any changes in the near future irrespective of any political winds.

LinLui

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 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.

They took nothing out? How did you get public services then? You and your siblings never went to school or visited a doctor? Of course they got a lot "out". 

They might feel the state should pay for their care. Feelings don't pay bills. They (and you) clearly have no idea what care costs and what basic provision buys. It isn't a "chip in" - you could be facing extra £100's per week to provide the support they need. 

And actually, the lifetime smoker/alcoholic/ drug user IS "stripped of their assets when they need care - everyone is expected to contribute and if they can't then they will be allocated to the barest minimum - which is deeply unpleasant in many cases. 

It isn't about what is right or wrong - it is about what is decent and humane. Unfortrunately I see absolutely no prospect of the kind of money being available to improve care conditions or bolster state provision.

I would strongly suggest that you, your siblings and your parents get a more realistic view of the care system before making such decisions. Especially since there is no time limitation on "deprivation of capital", and they could end up with worse than nothing, because you are deliberately transferring the house to avoid care costs, and the authoroties are not that stupid that they won't notice - and come after you and your siblings. 

MeteredOut

Grumpy_chap said:

Nothing has changed since the OP last asked this question.
https://forums.moneysavingexpert.com/discussion/6401820/parents-house-and-care-fees#latest

I don't imagine that there will be any changes in the near future irrespective of any political winds.

I wonder if the advice referred to in this thread is the same advice received almost 2 years ago.

Bookworm105

MeteredOut said:

Grumpy_chap said:

Nothing has changed since the OP last asked this question.
https://forums.moneysavingexpert.com/discussion/6401820/parents-house-and-care-fees#latest

I don't imagine that there will be any changes in the near future irrespective of any political winds.

I wonder if the advice referred to in this thread is the same advice received almost 2 years ago.

read the previous thread and find out!
won't be the first time an OP thinks the facts of an answer will change if they keep repeating the question