Joint tenants or tenants in common

DancingQueen2025

Hello,

My sibling and I were gifted our parents home in 2011 as joint tenants.

For various reasons they have stayed in the property & have not paid rent so we know that the “gift without benefit “ doesn’t apply.


This was gifted before my sibling married and they have not had any benefit from it.

However since 2011, my sibling got married and has their own house. They are having marital difficulties and are thinking of divorce.

We know that this has to be disclosed but given that it was a pre martial asset and there is no benefit to them currently, is it likely that the person they are may divorce would have any claim?


We are considering severing the tenancy to be able to change proportions so that if they have a claim it is half of not very much and then post divorce, reinstating joint tenancy.
Would that safeguard our parents  house?

Brie

My understanding is that the house is an asset and so would have to be declared.  And changing proportions to avoid a marital claim is unlikely to work - if it did every well off individual would do this prior to getting into divorce proceedings.  

Frankly I wouldn't trust a bunch of strangers on a website to give you seriously good information on this.  I think you should be talking to a solicitor.  Granted it's always nice to gather info so you can use the solicitor efficiently.

Keep_pedalling

This is just one reason why giving your home away is a totally idiotic thing to do. It will have also created a CGT liability for your both and has reduced your parents potential IHT exemptions from £1M to £650k.

As above legal advice required and keep your fingers crossed that your SIL is a reasonable person.

SarahB16

Keep_pedalling said:

This is just one reason why giving your home away is a totally idiotic thing to do. 

This is why this forum is so wonderful. 

My mum was thinking of transferring ownership of her house to me (perhaps 50% and very early thoughts of hers and of course deprivation of assets would be a consideration too).  I shared on here her thoughts and was very quickly told it wouldn't be a good idea.  

Albermarle

My sibling and I were gifted our parents home in 2011 as joint tenants.

So as it was a gift, then you and your sibling own 50% each, regardless of what happened afterwards.

DancingQueen2025

I came on here for advice, not to be called an idiot- really nice, really nice to start name calling.


 I can not change the past and am not willing to disclose the reasons why my parents stayed in that house.

But thanks for telling me what I ready know 

Neil49

I'm sure the gifting was done with good intentions all those years ago but you now need to get serious professional advice to resolve the situation you now find yourselves in. 

pinkshoes

DancingQueen2025 said:

I came on here for advice, not to be called an idiot- really nice, really nice to start name calling.


 I can not change the past and am not willing to disclose the reasons why my parents stayed in that house.

But thanks for telling me what I ready know 

No one has called you an idiot.

A post merely states that in general, giving away your home is idiotic and explained why - useful for others who are thinking of doing the same as it's important to understand why this can be a headache under certain circumstances. 

You and your sister jointly own half the house each, so her 50% will count as an asset in her potential divorce unfortunately.

It will depend on how long they were married, but 50/50 of all assets (pensions, property, savings etc...) is usually a starting point. It would be very sensible for your sister seek professional legal advice at this point.

Someone I know had a similar issue but had helped her sibling out buying a house, so owned a 25% share in the house. Thankfully the divorce was amicable (infertility issues and one not being happy childless) and the ex agreed to ignore the money in the house as it had been purchased long before they met. 

Keep_pedalling

DancingQueen2025 said:

I came on here for advice, not to be called an idiot- really nice, really nice to start name calling.


 I can not change the past and am not willing to disclose the reasons why my parents stayed in that house.

But thanks for telling me what I ready know 

I did not call you an idiot, just saying gifting your home is an idiotic act. People often do this or put their homes in trust because they horrible misinformed. Yes you cannot change the past but there may be things your parents can do to improve things. 

Do they have sufficient assets to move out and buy a new home for themselves? If they do and their total estate (including the house they gave away) exceeds £650k then it could significantly reduce any potential IHT because their estates could then flame the residential NRBs and if they survive another 7 years the gift will also drop out of the estate.