Gifting house to children

[michael_JCWS]

How can I give my house to my children, so that when the time comes that don't loose out to either care home tax or inheritance tax ?

If I sold my house to my children, does it have to be for market value ? Presumably I'd then have to live 7 years and pay the going rent to stay there ?

Cheer

[Elderly]

OP I assume you've noticed this :
http://www.pistonheads.com/gassing/topic.asp?h=0&a...

[Eric Mc]

If you gift the house to your children, would you intend to retain any rights to the property i.e. still live in it, for instance?

How many children would then own the property?

What would each child do with their share of the property?

Would any of them live in it?

If so, which ones?

Would it be rented out?

[megaphone]

What happens if you cannot look after yourself in old age, will one of your children take you in and care for you? How do you intend to pay for your welfare if yo need to go into a care home? Will your children pay? Or do you have other funds?

[98elise]

I thought making them tenants in common protects the house. I've not really looked into it though as I'm miles of care home age!

[P1ato]

My brother has moved in with our mother, and wants her to gift him her house so he's not "left in penury".

I think she can gift up to 50% and share all bills, but gifting a higher proportion (he wants 100%) might not work with HMRC.

If you intend to gift your house but continue to live in it (and not share it with a child), that's a gift with reservation of benefit not a potentially exempt transfer - not a good idea.

If you sell your house to your kids on an arm's length basis I suppose you could then rent it back at market level. It might take a while before that reduces your estate to have a significant impact on any future IHT charge.

Edited by P1ato on Monday 23 May 16:25

[ATG]

98elise said:

I thought making them tenants in common protects the house. I've not really looked into it though as I'm miles of care home age!

I think I was told that the chances are that it would but that it was down to the policy of the LA, not because there was some strict exemption.

[Lancerevo]

If you gift your house to your children as long as you live 7 years after house is gifted then no tax to be paid and u can go into a home without affecting the house you gifted.

[Eric Mc]

I don't think it's as simple as that - especially regarding care home costs.

[ukshooter]

Lancerevo said:

If you gift your house to your children as long as you live 7 years after house is gifted then no tax to be paid and u can go into a home without affecting the house you gifted.

Wouldn't like to rely on that.

Check out the Deprivation of assets in means testing rules.

http://www.ageuk.org.uk/Documents/EN-GB/Factsheets...

And also consider the impact of POAT. Pre owned Asset Tax

[Jockman]

Gift with reservation is screaming at me!

[mph1977]

Lancerevo said:

If you gift your house to your children as long as you live 7 years after house is gifted then no tax to be paid and u can go into a home without affecting the house you gifted.

Gift with reservation ? (unless you are paying market rent)

Deprivation of Assets ?

I think you are confusing the 7 years bit with IHT

[mph1977]

Jockman said:

Gift with reservation is screaming at me!

that was the general upshot of the other recent thread

[Ozzie Osmond]

Put simply,

• If you give your house away it's no longer yours, so
• If you want to live in it you will need to pay a market rent to the new owner.

Otherwise the gift is nothing but a sham and the authorities will see straight through it. In other words, your name may no longer be on the Title but it's still your house.

[Eric Mc]

Substance over form

Reality trumps paper

[markcoznottz]

7 year rule simple enough it's the deprivation of assets which is more subtle. How would the local authority prove intention if you were in perfect health when you made financial arrangements. If you've spent 30+ years paying a mortgage then you will bust a gut to protect your assets surely.

[Eric Mc]

If you give away the house you live in - where are you going to live?

[jonny996]

Why no just get them to pay the tax, LIKE THE REST OF US!

[vanordinaire]

If you want to be left with no house and no cash, but need somewhere to live in the meantime, couldn't you enter into an equity release scheme for the house and give your kids some of the cash?

[Countdown]

markcoznottz said:

7 year rule simple enough it's the deprivation of assets which is more subtle. How would the local authority prove intention if you were in perfect health when you made financial arrangements. If you've spent 30+ years paying a mortgage then you will bust a gut to protect your assets surely.

It's more a case of using "your" assets to pay for "your" care.

If you gift them to your kids they get a nice little bonus and the taxpayer (I.e the rest of us) pick up the tab.

I'm fully aware that the feckless get their care homes paid for by spending all their money on Stella and Sky. Just because they behave like doesn't mean that we should.