Transfer of Property - Parent to Children

[tjay]

My mom (aged 65) is in the process of transferring her property over to and my sister and I using a transfer of deed. The value of the property is approximately £140,000.

The solicitor who is dealing with the transaction has recommended that my mom takes some tax advice from an accountant to understand the implications to herself. Can anyone shed any light as to what these implications may be?

Also is there anything else that my sister and I need to be aware of from a tax point of view?

Any help would be much appreciated.
Many thanks.

[bob.fraser@towrylaw.]

I'm delighted to see that your mother's solicitor has suggested that she take tax advice. She needs to be very clear as to what she thinks are the benefits of this transfer.

At the moment, the property (which I assume is her home) obtains principal private residence relief from capital gains tax.
Once she transfers it, you and your sister (unless either or both of you are also living in the house)will be liable for CGT on any gain in value (over and above your annual allowance and taper relief) from the date of the transfer.
Similarly, the house will still be considered to belong to your mother for inheritance tax purposes, which means that this reason cannot be used justify the transfer if the social services challenge it if your mother ever needs to enter a nursing home. (See the article under Tax Investments on the pitfalls on transferring the family home).


Bob Fraser
Certified Financial Planner