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JGM
JGM, Solicitor
Category: Scots Law
Satisfied Customers: 11125
Experience:  30 years as a practising solicitor.
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I want to help my father pay off his remaining mortgage, so

Resolved Question:

I want to help my father pay off his remaining mortgage , so he does'nt have to worry about paying rent any more, as he has terminal cancer.
he's been given 5-7 years to live
once its paid off he will sign the house in to my name. and he would continue to live there. are there any issues with this ? house is worth less than 100k
thanks
Submitted: 11 months ago.
Category: Scots Law
Expert:  F E Smith replied 11 months ago.

Do you have any siblings or any other relative who could potentially inherit part of your father’s estate, who might object and claim that you had coerced your father into this?

Do you have another house which you live in?

Customer: replied 11 months ago.
I have a sister and brother
Who both own there own property
And are both aware of the situation and totally fine with it as they cannot afford to support him financially.
The house is solely left to me on the will at the moment anyway.
Expert:  F E Smith replied 11 months ago.

I’m sorry, I’ve just noticed that you are in Scotland.

The situation may be different than England so I will have to opt out for a Scottish expert.

Expert:  JGM replied 11 months ago.

I am a solicitor in Scotland. There is no issue with you paying off the mortgage. The only issue with the house being transferred to you whilst your father is alive is that you might eventually incur a capital gains tax liability when the house is finally sold, if it goes up substantially in value. If it remains in your father's name then that wouldn't happen as its his main residence. However, wills can be changed and if you decide not to transfer the title just now, you could take a security over the property in your favour and also enter into a Minute of Agreement which would be signed by both of you agreeing that the house will be transferred to you on death. If, however, you don't think the property will increase substantially in value then the lifetime transfer is the way forward. Remember that if you already have a house you would be liable to Additional Dwelling Supplement at 3% of market value. Happy to discuss. I hope that helps. Please leave a positive rating so that I am creditd for my time.

Customer: replied 10 months ago.
Hi Thank you for your reply.
i would not be planning to sell the house in the future, if he transferred the house into my name and carried on paying the bills etc .. would he still have to pay rent or any kind of taxes ?
I dont own another home and live out of the country at the moment, from my side ideally i would like to use the house as equity to buy a place of my own in the uk in the future,
thanks
scott
Expert:  JGM replied 10 months ago.

Thanks for clarifying. From what you say, you could do the transfer now and your father could remain in the house and pay the bills. He would not have to pay rent unless there is a risk that his estate would be liable for inheritance tax in which case he should pay a market rent so as to exclude the value of the house from his estate on his death. If he is under the IHT limit of £325K this doesn't matter.

Customer: replied 10 months ago.
Hi the house is worth around 100k, so no worries on the IHT.
which transfer would i have to do ?
also as i currently live out of the country would i need to pay any tax or anything on the property ?
i really just want to make sure hes got a place to live long term and if i need to pay anything else in the near future
thanks
Expert:  JGM replied 10 months ago.

You have to repay the mortgage and ask the lender to discharge the security over the property that they currently hold. Your father signs the title over to you for love favour and affection so that no LBTT is payable as it would be a gift. Your title is registered at the Land Register which will charge you £120. Solicitors fees would be about £750 plus VAT.

Customer: replied 10 months ago.
excellent thank you ,
this would be all that is necessary for now and no issues in the future ?
thanks
Expert:  JGM replied 10 months ago.

No, only a potential CGT liability as advised above. I hope that helps. Please leave a positive rating so that I am credited for my time.

JGM, Solicitor
Category: Scots Law
Satisfied Customers: 11125
Experience: 30 years as a practising solicitor.
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