sign house over to children

by **andyraper** on Fri Jun 08, 2007 6:50 am

hi,can anyone help me clarify a grey area?i am a single child whose parents have just signed their house over to me.i was just wondering what would happen if my father died and my mother(who is in a wheelchair and disabled)had to go into a home?i have various people telling me different things ie,the state would take the house off me to fund my mothers living expenses in the home,if anything happened within 7years this would be the case,and they wouldnt be able to take anything as i would be the "owner" on the deeds!can anyone PLEASE help me on this and clarify it for me?thanks ,andy.

by **Lee Young** on Fri Jun 08, 2007 7:02 am

There is no time limt on how far back the local authority can look to detemine whether or not mum made a gift to deliberately deprive herself of capital with a view to ensuiring the state picks up the tab for her care.

The state can not ake the property off you - it can simply treat your parents as still owning it to detemine whether or not they should pay for their care.

7 years is an inheritance tax thing. Whilst your parents live in the property for inheritance tax purposes the property will be deemed to remain in their estates.

When the property is sold you will pay capital gains tax unless (assuming you do not live there also) there is a trust arrangement guaranteeing their occupation of the property.

by **Peter D** on Fri Jun 08, 2007 9:08 am

I concur. However you really should have checked up on this before the transfer. Did the solicitor warn you about your CGT liability or any mention of a Trust as Lee suggests. Regards Peter

by **andyraper** on Fri Jun 08, 2007 4:12 pm

what do you mean by a trust arrangement ?thanx,andy.

by **Peter D** on Sat Jun 09, 2007 12:34 am

If the house has not been place in a Trust then you have a problem. Firstly you are now liable for CGT based on the rise of the property value from the date of ownership to the date of sale, secondly although there is a 7 year rule this only applies to the gift from your parents estate, however as they continue to live in the property it is deemed to remain in there estate for and future IHT calculations in the future. Thirdly the ownership of the house will highly probably be deemed by any LA care assessor as a deliberate attempt to deprive the estate of asset and your ownership will be ignored, and in fact the liability for care fees will fall on you. Is there an IHT problem i.e. is the esate worth more than Â£300,000. Did your solicitor question this action, how did you get the deeds changed. 'I have various people telling me different things' Yep variuos people do not know what they are talking about. Regards Peter