Putting house in daughter's name

I'm 70, have my own (no mortgage) terraced house in a crappy area worth approximately 150k on a good day. What are the financial implications (I'm aware of the personal ones) if I transfer the house to my daughter now instead of leaving it to her on my death? She's living with her partner and their 2 teenage children, has a mortgage and both have reasonably good jobs.

I'm getting on now and am thinking about moving into assisted living in the future (maybe 5 years or so)



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Comments

  • RAS
    RAS Posts: 34,962 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Partner or spouse?
    If you've have not made a mistake, you've made nothing
  • TheSpectator
    TheSpectator Posts: 862 Forumite
    500 Posts Name Dropper
    Daft idea, daughter may be liable to Capital Gains tax when it's eventually sold. Inheriting it from you upon death won't.

    Deprivation of assets.
  • 400ixl
    400ixl Posts: 4,482 Forumite
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    Could be lots of consequences and rarely is this a good idea.

    What if you were to need care in the future, this would be seen as deprivation of assets.
    If she has a property already then this would be seen as a second property and treated as such for things like council tax
    She would also become responsible for any capital gains tax from the time you transfer it.

    What is the reason for wanting to transfer it now? Is your estate going to exceed the inheritance tax limits?

    Other will be along with more detail on the consequences.
  • Voyager2002
    Voyager2002 Posts: 16,063 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    freccles said:

    I'm 70, have my own (no mortgage) terraced house in a crappy area worth approximately 150k on a good day. What are the financial implications (I'm aware of the personal ones) if I transfer the house to my daughter now instead of leaving it to her on my death? She's living with her partner and their 2 teenage children, has a mortgage and both have reasonably good jobs.

    I'm getting on now and am thinking about moving into assisted living in the future (maybe 5 years or so)




    If you are going to continue living in it, there would be no benefit: if you go into a care home the value of the house would still be considered when assessing you for fees. Google the term "gift with reservations".

    Furthermore, if your daughter ever sells her home and buys a new one (change of job?) while owning another property, she would then face an increased bill for stamp duty.

    All in all a thoroughly bad idea, unless you are going to renounce the world and move into a monastery or something...
  • elsien
    elsien Posts: 35,524 Forumite
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    edited 13 February at 9:50AM
    Aside from the considerations listed above,  will you not need the equity from your house in order to move into assisted-living in the future?

    Other financial implications include if your daughter divorces the house would be included as an asset in any marital split. If life throws a curveball (illness redundancy) and they ever need to claim means tested benefits, the house they are not living in rules them out of those claims. You are effectively giving up your security unless you have substantial other assets.
    All shall be well, and all shall be well, and all manner of things shall be well.

    Pedant alert - it's could have, not could of.
  • FlorayG
    FlorayG Posts: 2,056 Forumite
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    OP I think the after effects might depend partly on why you want to do this. What advantages does it offer you ( that might outweigh the disadvantages)
  • Keep_pedalling
    Keep_pedalling Posts: 20,191 Forumite
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    This would be a very silly thing to do and won’t work if this is to avoid care costs. 
  • freccles
    freccles Posts: 71 Forumite
    Fifth Anniversary 10 Posts
    Thanks all. No spouse. It was really just an idea to get everything sorted before I pop my clogs. (I'm a control freak). Also yes, with the idea that if I moved into rented accomodation eventually, I might be able to claim something towards the cost
  • FlorayG
    FlorayG Posts: 2,056 Forumite
    Seventh Anniversary 1,000 Posts Photogenic Name Dropper
    freccles said:
    Thanks all. No spouse. It was really just an idea to get everything sorted before I pop my clogs. (I'm a control freak). Also yes, with the idea that if I moved into rented accomodation eventually, I might be able to claim something towards the cost
    No sadly it won't work like that. Best to control things by writing a very clear will
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