His name is Posted January 22, 2019 Share Posted January 22, 2019 My mum has suggested that she signs over her house to myself as she's worried that if she needs care in the future she may be forced to sell the house to cover care costs. The house is mortgage free. Im not sure if this would be the case if future care was needed or what the process would be? Has anyone got any knowledge of this or any advice? Cheers Quote Link to comment Share on other sites More sharing options...
Governor Tarkin Posted January 22, 2019 Share Posted January 22, 2019 Can you not buy it from her for a quid or some such like? Quote Link to comment Share on other sites More sharing options...
Jambo-Jimbo Posted January 22, 2019 Share Posted January 22, 2019 4 minutes ago, Lord BJ said: I’m not expert on this and the rules around it are continually changing. Professional advice would be best taken However, there is nothing to stop you mother gifting the house to you. However, there are implications to you and your mother. It would effectively be a gift and therefore depending on your circumstances you would be liable for tax on it, including stamp duty etc. If your mum lives over 7 years, I think you might be fine. Though would still be liable for some. Whilst, I think if she doesn’t pay rent once gifted to you it will be subject to inheritance tax, whilst any rent would be subject to taxf There are are some issues if your mum chooses to do it. You and her fall out she’s potentially in trouble etc or if your married and you and your partner get divorced they could be entitled to half that home. Or even you get into financial difficulty that could impact her. Whilst some LA’s, have I believed clocked people doing this and have managed to force the home back to original ownership and claim money from for care etc from sale of house! Deliberate deprivation of asset from memory though might be English. If your mum chooses to sell to you at reduced rate, you would be liable for difference a gift in much same way as house. i would suggest there are ways around it, maybe setting up a trust might be an option. However, it depends what you want to do but inheritance tax, in the main is one of the easiest taxes to reduce your liability for. For me inheritance tax should be scrapped, it doesn’t impact those at the top it impacts your average joe way more and disproportionality. Whilst, I think double taxing is a ****ing joke. That rings a bell, I may well be wrong but I seem to recall reading about a case where the parent/s signed the house over to their daughter, she and her husband then split up years later and the ex-husband was entitled to half the house, he then forced his ex to sell the house and the parents were then made homeless, it was their house yet they lost it and were then left with nothing. As said I might be talking crap, but the above does ring a bell. Quote Link to comment Share on other sites More sharing options...
XB52 Posted January 22, 2019 Share Posted January 22, 2019 There is a 7 year limit on 'gifts' like this and, as others said, there are potential issues regarding if the child divorces. When my mum died my dad gave half the house to me and my brothers, I suspect divorce never came into his or our heads. my wife and i, in our wills, have said if one of us dies, the house goes to our kids, but with a life rent clause. This means the surviving partner lived in the house for the rest of their life but the house is safe regarding any care home costs. Really need to see a lawyer in this. Quote Link to comment Share on other sites More sharing options...
theo1874 Posted January 22, 2019 Share Posted January 22, 2019 You would be better looking into doing something called a power of attorney, where you can enter into a legal agreement to take on your mum's financials and house etc. An agreement can be put in writing that she cannot be removed from her home in any circumstance (unless care was seriously needed). A lawyer would be able to explain it better but probably worth considering as it keeps your mum's estate as per her will. Quote Link to comment Share on other sites More sharing options...
mrmarkus1981 Posted January 22, 2019 Share Posted January 22, 2019 Its called a discretionary Trust, i'm getting some info sent to me. I'll post it up shortly Quote Link to comment Share on other sites More sharing options...
mrmarkus1981 Posted January 22, 2019 Share Posted January 22, 2019 Family Protection Trust 1. What is the Family Protection Trust? This is a form of trust known as a lifetime discretionary trust. A trust is an arrangement whereby one party (a trustor or settlor) transfers the assets or property to another party (the trustees) for the benefit of another person or persons (the beneficiaries). A discretionary trust is simply a trust whereby trustees are given the discretion as to when and or to whom the trust fund is to be paid or transferred. When the trust is set up you transfer all or part of your assets to one or more persons called the "trustees". The trust deed contains instructions on how the trustees are to administers those assets and how to distribute them. You can appoint yourself as a trustee and thereby retain control over the assets. We recommend that you appoint other trusted members of your family and/ or trusted professional advisors. The choice is yours. 2. What can I transfer into the trust? You can transfer almost all of your assets including your house into the trust. However, signing the trust deed is not enough. You must transfer your assets into the trust. In order to transfer your home into a trust you must register or record the title to the house in the names of the trustees. We will arrange for the transfer as part of the setting up of the trust. In order to transfer savings you may require to set up a trust account with a bank. Due to money laundering and identification requirements the bank will require you to attend their offices to complete same. 3. Can I transfer assets out of the trust? Yes provided the majority of the trustees agree. In Scotland decisions of trustees is by majority. 4. How much can be put into the trust? There is no limit as to how much you can put into the trust but there are tax implications if you exceed the Inheritance Tax threshold (currently £325,000 for a single person and £650,000 for a couple or £900,000 of your estate includes your home). We advise not to put more than the Inheritance Tax lifetime allowance into the trust otherwise you will incur an IHT liability. Furthermore, every ten years the trust fund must be valued and further charge could be incurred. Accordingly it is important to carefully consider the value of the assets to be placed in the trust. We can discuss this with you in more detail. 5. Registration of the trust You will need to register the trust with HMRC if it pays or owes tax. You should tell HMRC if you expect the trust to receive income or make chargeable capital gains (profits) from the sale of assets within the next tax year. There is no need to tell HMRC if a trust is not going to receive any income or make any chargeable gains. 6. Advantages of the trust (A) Saving Expense in executry Procedure By transferring all of your assets into a Family Protection Trust then should be able to avoid expensive executry procedure on your death. Upon death it is the norm for the executor to instruct solicitors to wind up the deceased's estate. The usual procedure is to obtain "confirmation" from the local Sheriff Court. The winding up of a deceased's estate therefore involves court procedure. The cost of such procedure is usually several thousand pounds. Furthermore, on death the estate cannot normally be paid out within the first six months, and usually takes substantially longer than this in order to complete. By setting up a lifetime discretionary trust and transferring the bulk of your assets into that trust then confirmation procedure can be avoided with a consequent saving in executry costs . Not only that, your beneficiaries will be saved the trouble and inconvenience at time of great distress to them. You will therefore have protected your beneficiaries from both expense and further distress. (B) Control of Succession (i) On death Scots Law seeks to protect the rights of the surviving spouse and all children to inherit part of the deceased's estate. In law these are known as prior rights and legal rights. It can sometimes be the case that a parent does not want a particular beneficiary to inherit a share of the estate. By placing their assets into a Family Protection Trust, the law of succession can be avoided and the parents wish can be achieved. (ii) Furthermore, A Family Protection Trust can be used to safeguard a situation where a party and their spouse have previously been married and there are issue of the previous relationship. In such circumstances, leaving a Will in favour of your spouse whom failing equally between all of the children carries the risk that in the death of the first spouse, the second spouse may thereafter change their Will. This risk can be avoided by the setting up of a Family Protection Trust. (iii) In addition it is not unknown for people during the course of life to have financial difficulties. If a child were to have entered into a trust deed or be sequestrated (bankrupt) at the time of inheritance then any sums due in terms of inheritance will be paid to the child's trustee in sequestration. In effect, the child will be disinherited of their inheritance. By transferring the bulk of your assets into a trust, the trustees can postpone payment of any such sums until the financial difficulties have ceased thereby ensuring that your child inherits their share of the estate. (iv) Similarly by setting up a lifetime discretionary trust and transferring the bulk of your assets into it the trustees can then regulate the timing of the payment. A trust provides flexibility. It allows the trustees to decide who takes what, if anything and when. (C) Mental Incapacity A Family Protection Trust can be used to protect against the possibility of the mental incapacity of the granter of the trust. Without such a trust the granter would require to either have granted a continuing Power of Attorney or an expensive court procedure would be required. A Family Protection Trust can be set up to provide more extensive powers and therefore avoid further court procedure than can be granted in either continuing Power of Attorney or obtained in terms of a Guardianship Order. (D) Children's Inheritance Tax The transfer of a parents estate to a child or children could result in the children's estate exceeding the inheritance tax threshold. Om the death of the child or children this could result in the children's estate having an inheritance liability. By transferring you r assets into a Family Protection Trust there is the ability to avoid such liability. (E) Nursing Home and Residential Care Home Fees. As well as addressing the foregoing problems, a Family Protection Trust may alleviate the problem of care home costs. At present, anyone going into a care home will be assessed for both capital and income. Such capital and income can be either actual capital/income or notional capital/income. If your total assets are over £27,250, you are required to pay in full. There is a sliding scale between £17,000 and £27,250. Below £17,000 you stop paying. Therefore a person requiring to go into a care home can potentially avoid such costs. The statistics are frightening. Currently it is estimated that one in two people will require to go into a nursing home or residential care home during the course of their life. The local authority carry out a Capital and Income Assessment in order to determine the actual and notional assets of anyone requiring such care. The local authority carry out a care assessment and a financial assessment. In Scotland anyone over 65 needing care can claim personal care payments to contribute towards the cost of their care. Currently, personal care payments are £174 per week for personal care and £79 per week for personal care giving a total of £253 per week for personal and nursing care. However, the average weekly cost of a residential care home is £600 and the average weekly cost of a nursing home is £841. Accordingly, a person going into a nursing home or residential care home can be forced to meet, on average, an annual bill of £22,152 to £30,576 per year. The average time in a nursing home or residential care home is two years. Therefore the amount that can be paid towards care costs can be considerable. Whilst there are anti-depravation provisions provided the trust is entered into for reasons other than the avoidance of such costs can result in such costs being avoided. We can further advise on this. Quote Link to comment Share on other sites More sharing options...
Phil Dunphy Posted January 22, 2019 Share Posted January 22, 2019 My partner works in this field and was helping her grandmother with something very similar recently. You’ll need to speak to a solicitor. Quote Link to comment Share on other sites More sharing options...
mrmarkus1981 Posted January 22, 2019 Share Posted January 22, 2019 For what its worth, what i posted above was sent to me by a Solicitor. Quote Link to comment Share on other sites More sharing options...
Peebo Posted January 22, 2019 Share Posted January 22, 2019 7 hours ago, Jambo-Jimbo said: That rings a bell, I may well be wrong but I seem to recall reading about a case where the parent/s signed the house over to their daughter, she and her husband then split up years later and the ex-husband was entitled to half the house, he then forced his ex to sell the house and the parents were then made homeless, it was their house yet they lost it and were then left with nothing. As said I might be talking crap, but the above does ring a bell. That’s the problem, though...it’s not their house at all. Quote Link to comment Share on other sites More sharing options...
Sharpie Posted January 22, 2019 Share Posted January 22, 2019 (edited) I am not sure if it helps but we have given our son power of attorney, we have also made him the executor in our will. He will pretty well inherit everything the house the car etc. Two things we were cautioned against one was making him a co owner of our car, the reason being if there was an accident, not being Prince Philip I would not be allowed just to let it go, but our son as a part owner would be liable with us if there was a cash settlement after litigation. The other warning we got was that we had named two grandchildren in our will, we had arranged for cash to be inherited by them, our lawyer suggested we remove the cash figure and instead put a percentage of the estate in there, the reason being if something turned up and there was money owed by the estate our son even if there was not enough there would still be responsible for the money to the grandchildren the percentage thing would protect him from that. I have mentioned it before, but when after the death of my mother and in preparation to bring my father to our home in Canada I went to a lawyer to sell their house. I was surprised when he told me that the house was mine to sell, that under Scottish Law when two names husband and wife on the deeds, the house goes to the eldest son. I was never sure about that, as I had to get a police friend to go to the lawyer to get our check after the house sold to the University. Edited January 22, 2019 by bobsharp Quote Link to comment Share on other sites More sharing options...
I P Knightley Posted January 22, 2019 Share Posted January 22, 2019 I've done it. House is mortgage free and is in a trust for our kids. It all sounds a bit Jimmy Carr or Rangers but it's entirely above board and, rather than a tax dodge, will simplify matters when we're deid or incapacitated. My M-i-L was advised to hand over her house to a trust between my wife and her siblings so that when the time comes for her to go into a home, her estate isn't hammered by nursing home fees. Stubborn old cow refused to take the advice and told each of the siblings that one of the others was trying to steal their inheritance. Hope she dies in as much misery as she puts her offspring through and I don't give a flying fork about the inheritance (although her grandchildren could probably do with a bob or two...) Sorry - I went off topic there for a little. I feel slightly better for doing so. Quote Link to comment Share on other sites More sharing options...
Swanny17 Posted January 22, 2019 Share Posted January 22, 2019 Deliberate deprivation of assets. Local Authorities could refuse care, or come after you for money, if your mum needs care. Unfortunately, it’s not just a case of transferring deeds or buying it for a tiny sum. Quote Link to comment Share on other sites More sharing options...
Dagger Is Back Posted January 22, 2019 Share Posted January 22, 2019 (edited) Speak to a professional. It’s a minefield and no case will be exactly the same. Edited January 22, 2019 by Dagger Is Back Quote Link to comment Share on other sites More sharing options...
davemclaren Posted January 23, 2019 Share Posted January 23, 2019 11 hours ago, Dagger Is Back said: Speak to a professional. It’s a minefield and no case will be exactly the same. I agree. I’ not convinced that these schemes will actually protect the asset as much as is claimed. Quote Link to comment Share on other sites More sharing options...
Jambo-Jimbo Posted January 23, 2019 Share Posted January 23, 2019 2 hours ago, davemclaren said: I agree. I’ not convinced that these schemes will actually protect the asset as much as is claimed. Especially seeing as HMRC/Councils etc etc are aware of such schemes and have in the past and no doubts in the future, will either close them down or deem them as taxable. Quote Link to comment Share on other sites More sharing options...
micole Posted January 23, 2019 Share Posted January 23, 2019 Put the house into a trust fund , my mate did this and his mum had to go into care (dimentia) . It does cost a bit to set up but the local authority cannot touch the house if it is in trust. Sorry I'm no expert can only tell you what I have seen. Quote Link to comment Share on other sites More sharing options...
His name is Posted January 23, 2019 Author Share Posted January 23, 2019 Thanks folks. Certainly some food for thought. Quote Link to comment Share on other sites More sharing options...
Section Q Posted January 23, 2019 Share Posted January 23, 2019 On 22/01/2019 at 08:50, His name is said: My mum has suggested that she signs over her house to myself as she's worried that if she needs care in the future she may be forced to sell the house to cover care costs. The house is mortgage free. Im not sure if this would be the case if future care was needed or what the process would be? Has anyone got any knowledge of this or any advice? Cheers Buy the house from your mum at an agreed price you can afford. No land tax payable if it's your first purchase and agree a rent free period for her lifetime. Quote Link to comment Share on other sites More sharing options...
AngleParkMenace Posted January 23, 2019 Share Posted January 23, 2019 I’m torn on this one. One one hand selling the house will fund end life care. If the house isn’t able to be sold the tabs picked up by the rest of us. If everyone hides/surrenders assets it just means more of a burden to taxpayers Quote Link to comment Share on other sites More sharing options...
Dazo Posted January 24, 2019 Share Posted January 24, 2019 12 hours ago, AngleParkMenace said: I’m torn on this one. One one hand selling the house will fund end life care. If the house isn’t able to be sold the tabs picked up by the rest of us. If everyone hides/surrenders assets it just means more of a burden to taxpayers Isnt that why we pay tax and NI during our working life ? Pretty disgusting imo that the council can claim part/all of anyone’s estate that they have worked their whole life for and want to pass on to their children. Quote Link to comment Share on other sites More sharing options...
Tommy Brown Posted January 24, 2019 Share Posted January 24, 2019 13 hours ago, AngleParkMenace said: I’m torn on this one. One one hand selling the house will fund end life care. If the house isn’t able to be sold the tabs picked up by the rest of us. If everyone hides/surrenders assets it just means more of a burden to taxpayers 1 hour ago, Dazo said: Isnt that why we pay tax and NI during our working life ? Pretty disgusting imo that the council can claim part/all of anyone’s estate that they have worked their whole life for and want to pass on to their children. You could be right Dazo, but if we are to factor in health care for an aging population, tax will have to raise higher & higher. I'm glad APM posted, as I have been meaning to. I have often thought about this, a decision that may come to me sooner than most poster's on here. Some younger guys (particularly with no inheritance to look forward to) will question why should I pay for some other family to live in care. We all want to be socialist, but we want to keep our own money. It really is a touchy subject. Quote Link to comment Share on other sites More sharing options...
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