musing on putting a holiday home in the name of adult kids

sheramber

If you pay market rent then your children could be liable for income tax on the payments.
 

When sold there would be CGT to consider, whereas there is no CGT on death. 

silvercar

sheramber said:

If you pay market rent then your children could be liable for income tax on the payments.
 

When sold there would be CGT to consider, whereas there is no CGT on death. 

1. valid point

2. we wouldn't intend selling, and if we did that point is true whoever's name goes on the deeds.

sheramber

silvercar said:

sheramber said:

If you pay market rent then your children could be liable for income tax on the payments.
 

When sold there would be CGT to consider, whereas there is no CGT on death. 

1. valid point

2. we wouldn't intend selling, and if we did that point is true whoever's name goes on the deeds.

Will your children not sell at some point, probably after your death? 

They would be liable for CGT from purchase. 

If they inherited it any CGT on selling would be from date and value they inherited. 

silvercar

sheramber said:

silvercar said:

sheramber said:

If you pay market rent then your children could be liable for income tax on the payments.
 

When sold there would be CGT to consider, whereas there is no CGT on death. 

1. valid point

2. we wouldn't intend selling, and if we did that point is true whoever's name goes on the deeds.

Will your children not sell at some point, probably after your death? 

They would be liable for CGT from purchase. 

If they inherited it any CGT on selling would be from date and value they inherited. 

Oh yes, good point. I missed that. Though if it is in our name they would pay inheritance tax on it. 

sheramber

silvercar said:

sheramber said:

silvercar said:

sheramber said:

If you pay market rent then your children could be liable for income tax on the payments.
 

When sold there would be CGT to consider, whereas there is no CGT on death. 

1. valid point

2. we wouldn't intend selling, and if we did that point is true whoever's name goes on the deeds.

Will your children not sell at some point, probably after your death? 

They would be liable for CGT from purchase. 

If they inherited it any CGT on selling would be from date and value they inherited. 

Oh yes, good point. I missed that. Though if it is in our name they would pay inheritance tax on it. 

Your estate would pay any inheritance tax. 

Grumpy_chap

silvercar said:

Oh yes, good point. I missed that. Though if it is in our name they would pay inheritance tax on it. 

Only if your Estate remains liable for IHT (after the available allowances) by the time of your death.

You may well spend more than you currently envisage if you require care needs to be funded, assuming you'd want to use the benefits of your diligent working time earnings to enjoy the best level of care practically available rather than over-my-dead-body-ville.  I assume also that your children would only want for you to have the best.

You could always follow the example of Maggie and enjoy the necessary care if it is ever required seeing out your final days as a resident at The Ritz.  That will avoid the IHT matters.

penners324

So the kids will have to pay additional SDLT every time they want to buy a new house.

They will have to pay CGT if and it's sold.

It'll become part of their estate, so they would have split their share, in cash, if they get divorced.

It'll likely be seen as deprivation of assets if you go into a care home.

Grumpy_chap

penners324 said:

So the kids will have to pay additional SDLT every time they want to buy a new house.

No, they will not.
The OP stated that the children are already homeowners.
There will be additional SDLT when the holiday home is purchased, irrespective of whether this is the OP or the children.
If the OP or the children decide to move house then they can take advantage of PPR relief which avoids the additional SDLT (subject to time limits on changing PPR).

silvercar

penners324 said:

So the kids will have to pay additional SDLT every time they want to buy a new house.

They will have to pay CGT if and it's sold.

It'll become part of their estate, so they would have split their share, in cash, if they get divorced.

It'll likely be seen as deprivation of assets if you go into a care home.

I thought deprivation of assets only kicked in if you showed any signs of needing care at the time of the gift?
In any case, we have sufficient for our care earmarked elsewhere.

Extra SDLT on moving PPR won't apply as they already have a PPR each that they can replace if they decide to move.

We'd be lumbered with CGT on sale, as would they; so that won't make a difference. Same as we'd be saddled with extra SDLT on purchase as would they.

Isthisforreal99

silvercar said:

penners324 said:

So the kids will have to pay additional SDLT every time they want to buy a new house.

They will have to pay CGT if and it's sold.

It'll become part of their estate, so they would have split their share, in cash, if they get divorced.

It'll likely be seen as deprivation of assets if you go into a care home.

We'd be lumbered with CGT on sale, as would they; so that won't make a difference. 

Not upon death if it was only in your name.