Gifting a property to my parents

[HomeAdvice]

Upon their deaths it is up to them to split as they wish (I imagine it will be 3 ways between myself and 2 siblings). I do not inted for it all to revert back to me.

I gather from your responses that I am able to gift it to them in 2000, and as there is sufficient proof that they have lived here since then now complete the paperwork to reflect this. As it is up to them how they distribute in their "will" I have no CGT to pay?

[maths]

I’m afraid that pqtaxation is, I suspect, in danger of recreating a past that never existed by putting words into the “witness’s mouth”.

For someone who is a layperson it is most unlikely that when vacating a property that person said to, or agreed with, her parents that I am giving you the right to reside in my property for life and on your death it is to revert to me; indeed should you both, for example, go into care again the property is to revert to me. This is the understanding upon which you may occupy my property.

A more likely scenario would be where the person simply said to her parents, I’m moving out so you can both live in the property. I’m not sure of what will happen in the future but in the meantime why don’t you live here. No mention would be made of living there for life or the conditions under which the property would be “taken back” (eg in the event of care).

In short, the arrangement between owner and parents was of a purely informal nature; no trust/settlement was created.

Any attempt now, in 2011, to execute documents dated in 2011 purporting to confirm an understanding as far back as 2000 between daughter and parents designed to produce favourable tax effects now is unlikely prima facie in any event to be accepted by HMRC and, indeed, if it does not in fact reflect reality (but effectively recreates it) their execution is a dangerous game to play.

[HomeAdvice]

Is an alternative to put the property in a living trust so my parents are trustees?

I want to keep things as simple as possible and guarantee that my parents have the house to live in until their deaths.

[maths]

Assuming my scenario correct, then quite frankly I would simply gift house to parents. On their death they leave house to you/siblings.

On their death you each acquire at market value at that time and thus on a quick sale thereafter no CGT.

Gift would precipitate a CGT charge on your part as indicated in my example; if you have dates of acquisition and original cost and current mkt value more accurate calculation possible.

Might make sense to transfer say 50% this tax year and 50% next tax year enabling two lots of CGT free amounts of £10,600 each which may reduce CGT to nil.

Trust seems unnecessarily complicated.

[pqtaxation]

I suppose it is for life. I had no intention of selling and since they were moving it seemed the best option.

On what basis did they move in? Was it for life?

..... I was only raising the question about whether you intended to gift them the property outright (for them to pass on as they wish in their wills) or whether you intended it should revert to you on their vacating/deaths

.. Upon their deaths it is up to them to split as they wish (I imagine it will be 3 ways between myself and 2 siblings). I d(o)id not intend for it all to revert back to me.

I’m afraid that pqtaxation is, I suspect, in danger of recreating a past that never existed by putting words into the “witness’s mouth”.

I don’t think the above excerpts show I was looking to put words into the witness’s mouth as maths asserts (with its implication of improper behaviour on my part – but, in my slightly jetlagged state, am I being unduly sensitive?).

Rather, both incredulum and I thought HomeAdvice seemed not to be totally clear what his/her intentions had been.

(S)he subsequently clarified them to say (s)he intended the gift to be outright (which may have include gifts of mortgage payments made after 2000 – it’s not clear who made mortgage payments after that date and/or when mortgage was fully repaid) and it is the parents’ decision to whom the unencumbered property should be bequeathed/devised.

It (is) was, in my view, clearly generous of HomeAdvice to gift the house to parents when (s)he in second post says s(he) does not own another home per below :

I have owned the property since the 1990's and lived in it until 2000. ... I live elsewhere due to work/relationship commitments but this is the only property I own.

.