How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Aston Lawyer Your Own Question

Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10408
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
16368554
Type Your Law Question Here...
Aston Lawyer is online now

Hi there, My family house is currently owned by my mother

Resolved Question:

Hi there,

My family house is currently owned by my mother and elderly father. My father would like to gift his half of the house to myself and my sister.

- There is no mortgage outstanding on the house
- My parents are paying off 10K to the council after an extension was fitted to the side of the house
- My parents do not pay council tax
- My father receives pension credit
- I live in Dubai
- My sister will live in the house with my mother and father

Can you let me know what sort of implications we could be facing as a result?
Submitted: 2 years ago.
Category: Law
Expert:  Aston Lawyer replied 2 years ago.

Hello and thanks for using Just Answer.

My name is ***** ***** am happy to assist you with your enquiry.

There are 3 main implications-

1. If someone goes into a Home, they will be assessed on how capital they own, including any share in a property. However, the house is disregarded in any such assessment if the other spouse is still living in it. Therefore, if only one of your in parents goes into a Home and the other remains living in the property, the value of it is disregarded. If the survivor or both of them go into a Home, the house value will be included 50/50 in any assessment.
If your Father has transferred his 50% share to you, he would still be classed as owning 50% if it could be shown that he has made the gift with the intention of trying to avoid payment of Nursing Home fees.
This is because, when assessing a party's capital, any gifts they have made are also taken into account, in that if the State can prove that someone has gifted their property to a relative to avoid being assessed as owning that property, they are still treated as owning that property when assessing the amount of their capital. Strictly speaking, the State can look at any gifts made by a party anytime during their lifetime, but the longer the period between making a gift and entering into a Home, the harder it is for the State to prove it was done to avoid paying N Home fees. Generally, any gifts of properties made within 10 years of someone going into a Home are scrutinised and the party would have to show there was a valid reason for the gift being made, other than to avoid paying N home fees.

The only sure way of safeguarding part of a party's property is to make a Will. Basically,your parents should consider making Wills, leaving their one half share in the property to their children/other relatives, with the proviso that the other spouse is entitled to remain living there rent free. The Solicitor who prepares the Will will also need to "sever the joint tenancy" on the property at the Land Registry, so that each party owns this separate 50% share. This is a relatively straight forward thing for the Solicitor to do.
This way, upon the first death, the other spouse is left only owning his or her 50% of the property, the other 50% of the deceased's share passing to the children/other relatives. This therefore safeguards 50% of the property if the surviving spouse needs to go into a Home.
Remember- the house is disregarded anyway if one spouse goes into a Home but the other is still alive and remains living in the house, there is nothing to worry about in this scenario.

2. Inheritance Tax. Although I doubt very much this will be an issue (your parents would have to have a joint estate worth over £650,000 at the date of death), the position is as follows-

If someone gifts a property but remains living in it, it is classed as a "gift with a reservation" and HMRC are entitled to still class the property as being owned by the deceased party (ie it is looked upon as being a scam and therefore there is no benefit in doing this).

3. On the basis that either you or your sister own a separate property in the UK, you would potentially be liable to Capaital Gains Tax as and when you sell your share in your parents property. CGT is payable on any increase in value between the date you acquire it (even if it is gifted to you, you are deemed to have received it for the open market value) and the date it is sold. You would need to speak to an Acoc**tant on this point upon any future Sale.

I hope this sets out the legal position to you and answers your question.

Kind Regards

AL

Customer: replied 2 years ago.
Thanks for your reply Al.

Just to give you a little more background -
Our situation is not avoiding nursing home fees and my dad would be living at the residence. Also he has a Will already in place which names myself and my sister as receivers of his share of the house.

Taking this into account would anything change from your above reply?

Thanks again
Expert:  Aston Lawyer replied 2 years ago.

Hi Beth,

Many many apologies for the delay in responding- sadly my internet connection has been down.

Thanks for your reply.

My answer remains the same taking into account your scenario. The only issue you really therefor ehas is in respect of Capital Gains tax, as and when you come to sell your due share in the property.

I must say, however, that if there is no particular reason why your Father needs to transfer his share to you now, as he has made a suitable provision in his Will, you all may feel it would be best for you not to go ahead with a Transfer now and deal with th eproperty whenever anything happens to your Father.

I hope this helps.

Kind Regards

AL

Expert:  Aston Lawyer replied 2 years ago.

Hi Beth,

Can I be of any more assistance to you?

Kind Regards

AL

Customer: replied 2 years ago.

Hi Al,


 


Thank you for your response, sorry for the delay. I am wondering what the situation would be if we were to transfer my dads half to my mother so that she owns 100% of the house? Could he gift this to her? Would she be subject to Captial Gains Tax, should she sell one day?


 


Best wishes,


 


Beth

Expert:  Aston Lawyer replied 2 years ago.

Hi Beth,

Any transfers between spouses are tax exempt, and as the property is your Mother's principal place of residence, no Capital Gains Tax would be payable on either the transfer to your Mother or when she eventually sold it.

I hope this assists you.

Kind Regards

AL

Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10408
Experience: Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
Aston Lawyer and other Law Specialists are ready to help you

What Customers are Saying:

 
 
 
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
< Previous | Next >
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
  • A quick response, a succinct and helpful answer in simple English. I believe I can now confront the counter party with confidence -- worth the 30 bucks! Rick
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
 
 
 

Meet The Experts:

 
 
 
  • Jo C.

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
< Previous | Next >
  • http://ww2.justanswer.com/uploads/EM/emus/2015-7-7_192327_bigstockportraitofconfidentfemale.64x64.jpg Jo C.'s Avatar

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
  • http://ww2.justanswer.com/uploads/BE/benjones/2015-12-1_0437_ennew.64x64.jpg Ben Jones's Avatar

    Ben Jones

    UK Lawyer

    Satisfied Customers:

    11553
    Qualified Solicitor - Please start your question with 'For Ben Jones'
  • http://ww2.justanswer.com/uploads/BU/Buachaill/2012-5-25_211156_barrister5.64x64.jpg Buachaill's Avatar

    Buachaill

    Barrister

    Satisfied Customers:

    1754
    Barrister 17 years experience
  • http://ww2.justanswer.com/uploads/JO/jojobi/2013-3-19_0265_maxlowryphoto.64x64.jpg Max Lowry's Avatar

    Max Lowry

    Advocate

    Satisfied Customers:

    894
    LLB, 10 years post qualification experience
  • http://ww2.justanswer.com/uploads/UK/UKLawyer/2012-4-12_9849_F2.64x64.jpg UK_Lawyer's Avatar

    UK_Lawyer

    Solicitor

    Satisfied Customers:

    750
    I am a qualified solicitor and an expert in UK law.
  • http://ww2.justanswer.com/uploads/KA/Kasare/kasare.64x64.jpg Kasare's Avatar

    Kasare

    Solicitor

    Satisfied Customers:

    402
    Solicitor, 10 yrs plus experience in civil litigation, employment and family law
  • http://ww2.justanswer.com/uploads/OS/osh/2015-7-7_19268_gettyimagesb.64x64.jpg Joshua's Avatar

    Joshua

    Lawyer

    Satisfied Customers:

    8199
    LL.B (Hons), Higher Prof. Dip. Law & Practice