First time buyer status if name is added on register as a trustee and beneficiary?

cherry76

My husband recently passed away and in his will he left 50% of the house in a trust for his two children and a life interest for me.I want to remove his name on the deed and add the two children name as trustees and beneficiaries. Will that affect my son status as a first time buyer if I add his name in the deed. He is looking to buy a flat in the near future. Or shall I wait until he buys  a flat before adding his name to the title deed.He will not inherit his shares until I die and the trust will come to an end. Thanks

Keep_pedalling

Legal ownership of your husband’s share of your home belongs to the trust and beneficial ownership to you. Your children are the remainder men and do not inherit until your death. This avoids them losing their FTB status, having to pay additional SDLT when they do buy their own place and avoids CGT when the property is sold.

It is not to make any changes at this stage and you should not put any onf the property in their names. What you will have to do within 2 years of his death is register the trust with HMRC. 

cherry76

If I put the property in their names at this stage. They will lose the first time buyer status. The reason is I want to do it while still alive and on my death.. The trust ends , my name can be removed from the deed and hopefully avoid probate as their names are already on the deed. Does this make sense? The savings will be below probate threshold.How easy is it to register the trust with HMRC? Thanks

RAS

What earthly use is avoiding probate?

Or are you confusing this with IHT, for which at appears there is a £650k to £1m allowance in your situation? Can you clarify the rough values of the savings and house?

And of course if you live in the house, it remains part of your estate for IHT circumstances even if you transfer ownership to your children. 

You'll be denying your children first time buyer status if they do not already own their own home.
They'll have a devil's own job claiming benefits if they are property owners.
If they marry or enter a civil partnership, then the roof over your head is at risk to pay for their divorce or split. Even worse if they are made bankrupt.
You indicate that the estate should not attract IHT? So why are you making your children unnecessarily liable for Capital Gains Tax? 

Keep_pedalling

cherry76 said:

If I put the property in their names at this stage. They will lose the first time buyer status. The reason is I want to do it while still alive and on my death.. The trust ends , my name can be removed from the deed and hopefully avoid probate as their names are already on the deed. Does this make sense? The savings will be below probate threshold.How easy is it to register the trust with HMRC? Thanks

That may or may not avoid probate (depends on what other assets you own at the time of your death) but it will certainly create far more complexity than a simple probate application, and lumber your children with tax liabilities they would otherwise not have had.