Signing over of parents house to children - help please!?

yummymummywales

Hi All,

Please excuse my very naive posting - have absolutely no idea about this area and so my question is probably very silly.

My husbands parents have decided that they would like to sign the house over to their children (my husband and his brother). They like this idea as if anything happens to them and they have to go into a nursing home etc. they would like the children to receive the money from the house and not the local council!

I am assuming that there are tax implications in doing this as otherwise the world and his dog would probably do so! The house is probably worth around £250,000 and they don't have anything else of note.


Can anyone advise on how this would affect us please, whether this is a sensible thing to do or whether there are other things to consider,

Many thanks,

calleyw

yummymummywales wrote: »

Hi All,

Please excuse my very naive posting - have absolutely no idea about this area and so my question is probably very silly.

My husbands parents have decided that they would like to sign the house over to their children (my husband and his brother). They like this idea as if anything happens to them and they have to go into a nursing home etc. they would like the children to receive the money from the house and not the local council!

I am assuming that there are tax implications in doing this as otherwise the world and his dog would probably do so! The house is probably worth around £250,000 and they don't have anything else of note.


Can anyone advise on how this would affect us please, whether this is a sensible thing to do or whether there are other things to consider,

Many thanks,

Go and get proper legal advice as it is not that easy which you do hint at and there lots of pit falls.

The local council might see it as intentionally depriving themselves of assets and councils have successfully reversed such actions.

And why should they not pay for their own care if they can afford it. Not a fair system but that is the way it is.

Yours

Calley

CLAPTON

as calley says the local council would see this as intentionally depriving themselves of assetts.

not everyone goes into care homes

if they do need to, then having that money will give them more choice and a better standard of care than depending upon the state.

when their children come to sell the property they may be hit with capital gains tax whereas there would be no IH tax otherwise

margaretclare

....and there is also a potential problem of giving, or leaving, a house to two people. It sometimes happens that one of the people the house is given to wants to live in it and the other wants to sell it to realise his 'share' in cash.

If parents give their house to their sons, where are they going to live? Is it envisaged that they still continue to live in it? If so, the parents must pay a market rent to sons, and sons must declare the rent as income on their tax returns.

HTH

CLAPTON

also forgot to say
the two sons would be the legal owners
if one of them died or divorced then their share would form part of their estate or part of the divorce settlement and so may pass to someone who does not necessary have the parents wlefare their first priority

localhero

Hi Yummymummywales,

Signing over the house now won't work. To legitimately avoid liability to long term care fees, your parents require up to date Wills.

A thread discussing this is here:

http://forums.moneysavingexpert.com/showthread.html?t=821931