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

We jointly own a large house with a mortgage however both of

Customer Question

We jointly own a large house with a mortgage however both of us are retired. My son and his wife live with us and what we would like to do is transfer either total or part ownership of the house to them.
This would allow all of us to continue enjoying the benefits of a larger house during our lifetimes , free up our pension as the mortgage cost is transferred .
Is their anything that prevents us from doing so ?
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.

Could you please let me know if your Son and his Wife would be paying off your Mortgage in consideration of you transferring the property or a percentage of it to them?

Is yours and your wife's joint Estate, including the value of the property, likely to be over £650,000?

I look forward to hearing from you.

Al

Customer: replied 2 years ago.
I believe that my son would either continue with the mortgage subject to renegotiations with the building society . Alternatively , if the property is divided between us would we be in the position to split the mortgage?
With ref to the value of the estate , yes it would exceed 650k.
Tnks
Expert:  Aston Lawyer replied 2 years ago.

Hi,

Thanks for your reply.

First and foremost, there is nothing stopping you from transferring the property to your Son and his wife or transferring a share to them.

However, either way, your Son and Wife would need to obtain the consent from your Building Society, in that their names would have to be added to the Mortgage- there shouldn't be any issue with this, but is something they would need to deal with, before proceeding.

Once the consent has been obtained, it is just a case of you instructing a Solicitor to deal with the legal Transfer, by way of the preparation and signing of a Land Registry Transfer.

Before then, it is a case of deciding whether you transfer the whole of the property to them or whether you retain an interest.

From an Inheritance tax aspect, under present laws (although these may change in the forthcoming budget), you and your wife have a joint tax free Estate of £650,000.Lifetime gifts do not form part of this Estate provided you survive for 7 years from the date of the gift. HOWEVER, if a party makes a gift, but then retains an interest in it, HM Revenue see this as a scam and will treat the party as still owning the gifted property, for Inheritance tax (IHT) purposes. Therefore, if you were to gift either all or part of the property, but remain living there, you would not be saving yourselves anything as far as IHT is concerned.

If you transfer the whole property, you are of course giving up any legal ownership in the property, and if your Son and wife were to get divorced/made bankrupt/die before you, you may find a third party acquires an interest in the property and these are circumstances you can not control.

You may feel,therefore, that it be best for you and your wife to retain some percentage share in the property, meaning you have an automatic right to remain living there!

I hope this assists and sets out the legal position.

Kind Regards

Al

Expert:  Aston Lawyer replied 2 years ago.

Hi,

Can I assit you any further?

Kind Regards

Al

Customer: replied 2 years ago.
Hi, just a follow up based on the info provided , on the supposition that we are all prepared to live together and share the cost , is it best for me to transfer 50 % ownership of the property to allow me to live there and then deal with the mortgage ?or would I need to sell part ownership and if so would this need to be at market value or could this just be a nominal sum?
It would appear that gifting the property is not the solution as we would not qualify to continue residing their, is this correct ?
The single purpose is to remain living in the house with shared costs to allow our respective pensions to provide the best quality of life. However their is the long term question of IHT , can I than gift propery / cash on the understanding that I would not gain benefit from said gift subject to living for 7 yrs after the gift?
Really appreciate the help as we try and formulate some form of plan .
Tnks
Expert:  Aston Lawyer replied 2 years ago.

Hi,

Thanks for your reply.

if you were to transfer a percentage of the property, you would still need to apply to your Building Society to add your Son and his wife on the Mortgage, as all legal owner also need to be on the Mortgage. As regards ***** ***** this could be zero or any sum you agree upon with your Son.

For IHT purposes, you can indeed make lifetimes gifts of cash to your Son, and if you were to survive 7 years, this sum would not be classed within your Estate.

As regards ***** ***** as you will remain living there, any transfer to your Son would not be seen as a true gift, whereby the 7 year applies, and you would still be treated as owning the property for IHT purposes.

I hope this clarifies matters.

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
Expert:  Aston Lawyer replied 2 years ago.

Hi,

If I have assisted, I would be grateful if you could rate my answer.

Kind Regards

Al

Customer: replied 2 years ago.
Hi Al , I need some further clarification to close this plse. ,
1. does either gifting/ tranfering 50% ownership preclude us from living in the house?or would a token rent payment suffice ?
2. Are we constrained by how much we can gift per year and can we gift on a rolling basis
3. Are you saying that by law their is no min sum that I would have to comply with when agreeing the value of selling a percentage of the house, providing both parties are in agreement?
4. By transferring either partial or full ownership and with it the mortgage ( subject to mortgage provider agreement ) , does my son than have full claim with no need to pay IHT or does this require us moving out or can we continue to reside in the property ?
Tnks P
Expert:  Aston Lawyer replied 2 years ago.

Hi,

1. Provided you retain some legal ownership,albeit only say a 50% percentage, you retain a right to remain living in the property as a legal owner.

2. You have a tax free allowance of £3,000 per tax year for IHT purposes. Any gifts above this are liable for IHT if you were to die within 7 years. You are free to gift as much as you like in this regard.

3. You are free to either gift the property or a percentage of it, or you can receive a token amount or the full market value from your son- all options are perfectly legal.

4. If you remain living in the property, you would be classed as owning the whole of the property for IHT purposes as it would be classed as "a gift with a reservation".

Hope this clarifies matters.

Kind Regards

Al

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
 
 
 

Related Law Questions