Home ownership transfer and charge on a property help please

[MrHappy]

So, after many years of marriage, my father has decided to leave my mother (amicable separation) and start a new life up in Scotland. They're not divorcing and he will be taking far less than 50% of their assets - just enough to live a simple life etc. He has already made an offer on a small property. I will be helping them out with some cash so that my mother can remain in the family home. Their assets aren't substantial enough for IHT to be an issue.

Three questions please. What's the easiest/quickest way to transfer their existing house from their joint names into just that of my mother (to avoid my father paying 2nd home stamp duty charge)? Am I right in thinking that the cash I give to my mother should be done as a charge on her property, so that the cash is repayable to me if her property is sold and, again, what's the easiest/quickest way?

Many thanks.

[jdwoodbury]

Having recently been through this as part of a divorce I will offer you my advice as follows:

Even if they are not getting divorced make sure they draft a full and detailed agreement between them on the split of assets, you will need this as evidence for the conveyancing solicitor who will manage the transfer of title. If you are married (or if you have just got divorced) you can transfer shared property between (ex)spouses with no stamp duty due, it cost me about £1k in my case to get a solicitor to manage this for me.

[jdwoodbury]

In respect to the charge on your mothers property this should be managed as a charging order against the title. You don't mention if the property is mortgaged, if not it's simpler and you should be able to ask the conveyancing solicitor to support. Another thing to note is your need advice on how the cash you have provided to her is treated, I would discuss with a tax advisor who understands IHT and gifts.

One other thing to consider, if your parents don't divorce, then in 2yrs after separation one of them could start divorce proceedings....and then claim against assets built up in the marriage (which would include your fathers new home). I would strongly suggest they divorce and obtain a financial agreement to protect themselves.

[MrHappy]

Many thanks for taking the time to reply. Never the happiest of times but at least this is amicable and maintaining a relationship for 60 years is no mean achievement in itself. I had quietly hoped that it may be a simple form filling exercise but I suppose the full solicitor route is the safest as far as protecting my dependents is concerned.
Cheers.

[The Moose]

Rather than taking a charge against the home, would you be better giving your mum a loan? More flexability?

[mike74]

Not saying this is the case here, but some people could claim this is just a ruse so that your parents or yourself can buy a nice little holiday home in Scotland and avoid paying the 3% SDLT and a possible Council Tax premium which can be levied on second homes.

[MrHappy]

The Moose said:

Rather than taking a charge against the home, would you be better giving your mum a loan? More flexability?

Thanks Moose. I agree, an informal loan would appear to be the easiest way of funding this and I'd be happy to do so. However my mother would like some sort of structured agreement to ring fence the money in the event, unlikely as it may seem at the moment, that one or the other should meet/marry someone else and have a claim on the money.

[MrHappy]

mike74 said:

Not saying this is the case here, but some people could claim this is just a ruse so that your parents or yourself can buy a nice little holiday home in Scotland and avoid paying the 3% SDLT and a possible Council Tax premium which can be levied on second homes.

I'm unsure as to how they monitor this so I don't know if it's a loophole or not (a tax loophole - surely not?!!!). Personally I wouldn't do it, but some might.

[The Moose]

MrHappy said:

The Moose said:

Rather than taking a charge against the home, would you be better giving your mum a loan? More flexability?

Thanks Moose. I agree, an informal loan would appear to be the easiest way of funding this and I'd be happy to do so. However my mother would like some sort of structured agreement to ring fence the money in the event, unlikely as it may seem at the moment, that one or the other should meet/marry someone else and have a claim on the money.

While I understand that, a personal loan is a structured agreement that would essentially operate in the same way, no?

The only difference I see is that you would get paid out of the house sold which may or may not be the best way forward?

I don’t know - Just struck me as wondering if you needed to be quite so formal about it and if that cut off any options in the future.