PLEASE READ BEFORE POSTING
Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.Transfering home ownership from my mother to me
Options
macman1977
Posts: 8 Forumite
Hi,
I'm new to the forum and I know aspects of this have been covered elsewhere but a bit of guidance advice to see if I'm getting this right would be appreciated.
My mother and father owned a house together that they purchased in 2000. They were 'tenants in common' I believe. Unfortunately my father passed away in 2001, and my mother has continued to pay the mortgage with contributions toward it from myself. I have lived in the house with her since then. Now 17 years later she is in good health and still works full-time as do I, however we're both getting older (I'm 40 now) and we're thinking it would be best to transfer the ownership of the house from her to me as currently I have no claim to the house, my name is on nothing etc...we don't want to have to eventually sell it due to inheritance tax and so on. There's no contention or issues with the property, we just want to ensure that we protect what we worked for. I don't own another property, never been married or have any other baggage that might add some kind of complication to the issue.
The house is worth an estimated £220,000-ish. We have about a £27,000 mortgage left on it.
From what I've read, this should be quite straightforward - a couple of forms from the Land Registry and a SDLT60 form for stamp duty - which I believe we would have to pay nothing on due to the fact that we don't owe a lot on the house.
Am I missing something? Is there a nasty shock or some dreaded fee that sounds like it's coming our way if we do this?
Do I REALLY need a solicitor for this or is it something we can do ourselves?
I'm new to the forum and I know aspects of this have been covered elsewhere but a bit of guidance advice to see if I'm getting this right would be appreciated.
My mother and father owned a house together that they purchased in 2000. They were 'tenants in common' I believe. Unfortunately my father passed away in 2001, and my mother has continued to pay the mortgage with contributions toward it from myself. I have lived in the house with her since then. Now 17 years later she is in good health and still works full-time as do I, however we're both getting older (I'm 40 now) and we're thinking it would be best to transfer the ownership of the house from her to me as currently I have no claim to the house, my name is on nothing etc...we don't want to have to eventually sell it due to inheritance tax and so on. There's no contention or issues with the property, we just want to ensure that we protect what we worked for. I don't own another property, never been married or have any other baggage that might add some kind of complication to the issue.
The house is worth an estimated £220,000-ish. We have about a £27,000 mortgage left on it.
From what I've read, this should be quite straightforward - a couple of forms from the Land Registry and a SDLT60 form for stamp duty - which I believe we would have to pay nothing on due to the fact that we don't owe a lot on the house.
Am I missing something? Is there a nasty shock or some dreaded fee that sounds like it's coming our way if we do this?
Do I REALLY need a solicitor for this or is it something we can do ourselves?
0
Comments
-
What are you planning to do about the outstanding mortgage? Will you be settling the amount outstanding?
Its extremely unlikely the mortgage lender will allow your mothers mortgage to continue in her name if she no longer owns the property.0 -
We'd be looking to transfer the outstanding amount to me as well.0
-
I assume you don't really understand how inheritance tax operates?
https://www.gov.uk/inheritance-tax/overview
if mother transfers the property to your name but she continues to live in it then it remains within her estate when she dies and her inheritance tax is calculated. That is called the gift with reservation of benefit (GWR) rule since she continues to benefit from the property by living in it despite not technically being its owner. The transfer is therefore ignored for tax purposes and she is treated as still being its owner.
equally importantly it is her main home but its only worth 220k so is her estate ever really going to be liable for inheritance tax to start with? Your father is dead, there may be all or some of his inheritance tax allowance still available. Your mother gets her allowance plus an allowance for the fact she is leaving her main home to her children. In total therefore when she dies her estate could have up to £850,000 of tax free allowances
Instead, by transferring it to you now she is probably doing something that is totally unnecessary and won't take it out of inheritance tax anyway0 -
Ok thanks. No you're right, neither of us really understands our position, that's why we need some advice.
I think it's unlikely as you pointed out that we're going to get hit by inheritance tax or stamp duty based on our limited understanding. The other concern from my mother's point of view is that effectively I don't have my name on anything regarding ownership of the property and it's a bit of a worry.
I do have two siblings - both moved away long ago and never lived in this property. In terms of inheritance when she passes away, if we do nothing, surely they get an equal claim of her estate?
She's keen for that not to happen, as I'm the one who contributed to the house over the last 17 years after my father passed away. It could mean having to sell the home if it has to be split three ways, with myself (being the only one who doesn't currently own a property) coming out the big loser in it.
Would it be enough for her to state that in her will? If so, would inheritance tax kick in then? (I will read the link you gave!) EDIT: As per the link, it appears not, as the value is under the threshold.
I'm on good terms with my siblings, but these things happen!0 -
They were 'tenants in common' I believe.
Did your father leave his interest in the property to you?0 -
Did your father leave his interest in the property to you?
No as he died suddenly without a will.0 -
Does your mother have a will?
If not, when she dies her assets will be split 3 ways between you and your 2 siblings.
If she writes a will leaving the house to you, how will your siblings feel? You say you are on good terms with them at present, would that still be the case if they lose out?
Ageing is a privilege not everyone gets.0 -
Why doesn't your Mum just write a will leaving the house to you? It can be written in such a way that your siblings have no claim on it.
She can also tell your siblings that the house will be left to you so it won't come as a shock when the time comes.
Alternatively, you could consider changing to joint ownership so that when either of you dies the survivor retains full ownership.0 -
Both my siblings are considerably better off financially than me and quite a bit older. We are on good terms but, as you said, strange things happen in these situations, don't they?
We just want to do the right thing and know that we've done enough to ensure that:
a. when she dies, I can pick up any outstanding mortgage payments and ownership of the house.
b. We're not going to get hit with unforeseen fees.
c. It's not going to be contended by siblings...ok we can't foresee that, but at least the chances of it being successfully split up can be minimized by doing.....?0 -
If the long term intention is for you to stay in the house as your home then one option would be to legally jointly own the house and document your beneficial interest to reflect your contributions and any gift element that your mother wishes to give you now.
As there is outstanding mortgage that would need reviewing potentially a joint mortgage on similar terms.
you them both reflect what you want to happen to your shares in the event of death in your wills, don't rule out the chance you could go first so cover that options as well.
By going joint owners that protects your mother from you kicking her out if you owned the place.0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608.1K Mortgages, Homes & Bills
- 173.1K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards