Gifting of a house

Exodi

elsien said:

I don't think it would necessarily  be considered as things stand because it was transferred 20 years ago and there is no evidence that it was to avoid care costs. And indeed the lady is still at home so it would seem that there was no imminent suggestion that care would be needed at the time the transfer was made. 
Obviously it is up the a decision maker if it ever comes to it, but the LA would have to prove the intention and I think they may be on difficult grounds in doing that. 

I just linked the tests - unless you mean there is no evidence in the form of a written note that states 'I am doing this to avoid care costs'?

I would say it's pretty clear cut but in case I'm being cynical, I'll put it to you - if not to avoid care costs, then why? It clearly doesn't help the beneficiaries (who now lose their first time buyer statuses) and as she intends to continue living in the property they would receive the proceeds in the same time frame as if it had just been bequeathed. I personally don't think there is any difficulty proving intention, as I can't think of any other logical reason to do what has been done (with the exception of the grandparents sitting on hundreds of thousands of pounds in other assets, and the intent is to bring her total estate under the IHT threshold - I could maybe understand it then).

sheramber

Exodi said:

elsien said:

I don't think it would necessarily  be considered as things stand because it was transferred 20 years ago and there is no evidence that it was to avoid care costs. And indeed the lady is still at home so it would seem that there was no imminent suggestion that care would be needed at the time the transfer was made. 
Obviously it is up the a decision maker if it ever comes to it, but the LA would have to prove the intention and I think they may be on difficult grounds in doing that. 

I just linked the tests - unless you mean there is no evidence in the form of a written note that states 'I am doing this to avoid care costs'?

I would say it's pretty clear cut but in case I'm being cynical, I'll put it to you - if not to avoid care costs, then why? It clearly doesn't help the beneficiaries (who now lose their first time buyer statuses) and as she intends to continue living in the property they would receive the proceeds in the same time frame as if it had just been bequeathed. I personally don't think there is any difficulty proving intention, as I can't think of any other logical reason to do what has been done (with the exception of the grandparents sitting on hundreds of thousands of pounds in other assets, and the intent is to bring her total estate under the IHT threshold - I could maybe understand it then).

As grandparents continued to live in house it would be a gift with reservations. 

sheramber

tcem said:

Just after some thoughts please.
in 2002 my Nan and grandad transferred their bungalow to my mum, me and my brother and sister. This was done at no value with a declaration of trust.The grandchildren were included in this transfer as my grandparents did not like my mums husband at the time (proved to be good judge of character!)My grandad has since passed and my Nan (coming up to 101) is still living in the bungalow. What would be the implications if we transferred our share of the property to my mum or even back to my Nan?  My mum (75) does not own her own home and would not want to live in the property. When my Nan passes her intention would be for the bungalow to be sold and for my mum to use the money towards buying her own home. 

The bungalow is worth I’d say no more than £200k.
Capital gains tax? Inheritance tax? 

Thanks in advance for any thoughts/suggestions. 

IHT woukd depend on what  the whole estate is worth but as the grandparents continued to live in the house it is a gift with reservations so still counted for IHT if applicable.

If you transfer the house to some else then CGT would be  payable  by all those transferring their share
This would be based on the  increase in value from the  market value when transferred originally and the market value at date of transfer now, less any legal costs. 

Bearing in mind no money is being received for the share of the house so the money for CGT would have to be found.