Question for legal profession folk re house...
Discussion
Hi all, bit of a strange one here, I’ll try to keep it brief. Just need a pointer really.
Situation.....wife’s Granny (100) and Mother(81) lived together until Granny died 8 months ago. It worked well as Granny’s brain was razor sharp but body dodgy. Mother physically fine but since she had a brain tumour removed a few years ago has capacity but forgets lots.
Wife and I are moving in to supervise her care rather than carers.
She said she would like to sign the house over to us with a caveat in all wills for her to remain there until completely physically incapable or dies. We are capable to provide medical care as long as it isn’t hospital level so that works.
The house is dedicated to my wife in Mother’s will but I remember Granny saying if Mother lives another 7 years inheritance tax is binned.
So......who do I speak to re this. Solicitor? Financial advisor? And is it doable.
Also, mother all for it and wifey has complete power of attorney over health and financial affairs.
Thanks in anticipation
Mike
Situation.....wife’s Granny (100) and Mother(81) lived together until Granny died 8 months ago. It worked well as Granny’s brain was razor sharp but body dodgy. Mother physically fine but since she had a brain tumour removed a few years ago has capacity but forgets lots.
Wife and I are moving in to supervise her care rather than carers.
She said she would like to sign the house over to us with a caveat in all wills for her to remain there until completely physically incapable or dies. We are capable to provide medical care as long as it isn’t hospital level so that works.
The house is dedicated to my wife in Mother’s will but I remember Granny saying if Mother lives another 7 years inheritance tax is binned.
So......who do I speak to re this. Solicitor? Financial advisor? And is it doable.
Also, mother all for it and wifey has complete power of attorney over health and financial affairs.
Thanks in anticipation
Mike
silverback mike said:
Hi all, bit of a strange one here, I’ll try to keep it brief. Just need a pointer really.
Situation.....wife’s Granny (100) and Mother(81) lived together until Granny died 8 months ago. It worked well as Granny’s brain was razor sharp but body dodgy. Mother physically fine but since she had a brain tumour removed a few years ago has capacity but forgets lots.
Wife and I are moving in to supervise her care rather than carers.
She said she would like to sign the house over to us with a caveat in all wills for her to remain there until completely physically incapable or dies. We are capable to provide medical care as long as it isn’t hospital level so that works.
The house is dedicated to my wife in Mother’s will but I remember Granny saying if Mother lives another 7 years inheritance tax is binned.
So......who do I speak to re this. Solicitor? Financial advisor? And is it doable.
Also, mother all for it and wifey has complete power of attorney over health and financial affairs.
Thanks in anticipation
Mike
Approx value of the house and Estate?Situation.....wife’s Granny (100) and Mother(81) lived together until Granny died 8 months ago. It worked well as Granny’s brain was razor sharp but body dodgy. Mother physically fine but since she had a brain tumour removed a few years ago has capacity but forgets lots.
Wife and I are moving in to supervise her care rather than carers.
She said she would like to sign the house over to us with a caveat in all wills for her to remain there until completely physically incapable or dies. We are capable to provide medical care as long as it isn’t hospital level so that works.
The house is dedicated to my wife in Mother’s will but I remember Granny saying if Mother lives another 7 years inheritance tax is binned.
So......who do I speak to re this. Solicitor? Financial advisor? And is it doable.
Also, mother all for it and wifey has complete power of attorney over health and financial affairs.
Thanks in anticipation
Mike
Was the house Granny’s? Mums? Half each? Any other family/beneficiaries?
More details required but if not a substantial Estate that is actually liable for IHT, discussion stops there? Although potentially moves on to other issues re means tested benefits etc.
Slaav said:
Approx value of the house and Estate?
Was the house Granny’s? Mums? Half each? Any other family/beneficiaries?
More details required but if not a substantial Estate that is actually liable for IHT, discussion stops there? Although potentially moves on to other issues re means tested benefits etc.
I’ll pm you if that’s ok slaavWas the house Granny’s? Mums? Half each? Any other family/beneficiaries?
More details required but if not a substantial Estate that is actually liable for IHT, discussion stops there? Although potentially moves on to other issues re means tested benefits etc.
Is the estate likely to hit IHT threshold , £325K?
Look at a deed of variation. You can vary granny's will so she effectively has left everything to granddaughter, rather than her daughter. You then benefit from her IHT allowance. This will then bring down mother's potential IHT and you will also benefit from her IHT allowance.
Leaving a family home to children also ads further IHT allowance.
https://www.gov.uk/alter-a-will-after-a-death
Look at a deed of variation. You can vary granny's will so she effectively has left everything to granddaughter, rather than her daughter. You then benefit from her IHT allowance. This will then bring down mother's potential IHT and you will also benefit from her IHT allowance.
Leaving a family home to children also ads further IHT allowance.
https://www.gov.uk/alter-a-will-after-a-death
This is one to be very careful on the exact implementation of, my neighbour passed away but it seems in some very convoluted way she initially gifted part of the property to her children and one moved in, this it seems if proportionate is accepted by the revenue, then she gifted the rest but stayed living there with them, rent free.
From the tale of woe, the son was telling me, HMRC are saying everything is void and it was her house and forms part of her estate since they don't believe it wasn't contrived.
Fees so far over 10k and a load of stress.
From the tale of woe, the son was telling me, HMRC are saying everything is void and it was her house and forms part of her estate since they don't believe it wasn't contrived.
Fees so far over 10k and a load of stress.
DaveA8 said:
This is one to be very careful on the exact implementation of, my neighbour passed away but it seems in some very convoluted way she initially gifted part of the property to her children and one moved in, this it seems if proportionate is accepted by the revenue, then she gifted the rest but stayed living there with them, rent free.
From the tale of woe, the son was telling me, HMRC are saying everything is void and it was her house and forms part of her estate since they don't believe it wasn't contrived.
Fees so far over 10k and a load of stress.
Gifts with Reservation? So asset effectively added back in before IHT calculation. Very counter productive. If she gifted the remaining portion but continued to live there ‘enjoying’ the asset without paying a fair market rent for that enjoyment, the ice is very thin indeed!From the tale of woe, the son was telling me, HMRC are saying everything is void and it was her house and forms part of her estate since they don't believe it wasn't contrived.
Fees so far over 10k and a load of stress.
There are ways you can transfer house without it being a 'gift with reservation', but you have to pay rent at market rate + your share of bills + live for another 7 yrs
There's also a potential further 175k that can be added to the IHT, called 'residence nil rate band', so possible to pass on 500k with no tax.
EtA; what will you do with current home? If you own then one house would have to be 'main residence', meaning any increase in value of the other at time of sale will be taxed, I think it falls under CGT, so 40% (??).
You need to weigh this up as it might be more tax efficient to inherit rather than have it 'gifted' now.
There's also a potential further 175k that can be added to the IHT, called 'residence nil rate band', so possible to pass on 500k with no tax.
EtA; what will you do with current home? If you own then one house would have to be 'main residence', meaning any increase in value of the other at time of sale will be taxed, I think it falls under CGT, so 40% (??).
You need to weigh this up as it might be more tax efficient to inherit rather than have it 'gifted' now.
Edited by Pinkie15 on Wednesday 5th May 16:56
Gassing Station | Speed, Plod & the Law | Top of Page | What's New | My Stuff