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plclegal
plclegal, Barrister
Category: Law
Satisfied Customers: 7868
Experience:  Barrister at law
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My wife and I own our bungalow outright. During the process

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My wife and I own our bungalow outright. During the process of purchasing the property we requested tenancy in common but the Proprietorship Register makes no mention of that so presumably we are joint owners. We would each like to leave our share of the property jointly to our children. Is it better/more convenient to gift the property before we die or include a Gift of Property clause in our Wills (mirror)?
JA: What steps have you taken so far? Have you prepared or filed any paperwork?
Customer: No
JA: Where is the bungalow located?
Customer: Dudley, Cramlington, Northumberland.
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: No

Good morning, thank you for your question. Do you have a copy of the land registry title that I can see? A tenants in common position is indicated by a restriction on the Title, such as 'No disposition by a sole proprietor.....................'

Kind regards

Marian

Customer: replied 13 days ago.
It does mention that phrase.

Does it continue 'the receipt of capital monies'?

Customer: replied 13 days ago.
under which capital money arises is to be registered.....

Yes, great, so that means you are tenants in common and your Wills can leave your separate shares direct to your children.

Marian

I have to go out now for a few hours.

Good afternoon, do you have any further questions?

Customer: replied 12 days ago.
Is it more convenient to gift our property to our children while we are still alive? This would require only one transfer transaction instead of two (once in each of mirror Wills) and there would be no need to mention property in the Wills.

That is up to you, you would need separate advice regarding gifting your home.

Customer: replied 11 days ago.
We now know that we are tenants in common. Is it more convenient to gift our property to our children now or include a gift of property clause in mirror Wills? The former would only require one transfer transaction instead of two and there would be no need to mention property at all in the Wills.
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Essentially, my view would be that gifting your property now may in fact cause more hassle than leaving the property in the wills.

There's the issue of tax, of course to consider, which can be complex. Whereas in a will there is a tax free portion of the estate to pass on, tax may be due upon the disposal of an asset.

There's also the issue of the surviving spouse not being protected in the event that the property is passed on to children and they have no where to live.

You want to avoid both of these pitfalls, ideally.

I'd speak to a wills solicitor about this when you have the wills drafted, but its fairly normal for mirror wills to grant the surviving spouse the right to live in the property for the remainder of their life, without this affecting the beneficial entitlement under the will for the intended recipients to inherit the property upon the death of both owners.

This type of arrangement protects both the owners (and prevents one being turfed out when the other passes away) and the beneficiaries under the will.

The actual transfer process itself is straightforward and not something that should concern you when going through your decision making processes.

I hope that this helps.

Thank you for your enquiry today. I am happy to answer follow-up questions - please do get in touch with requests for extra information or further queries and I will do my best to help you.

plclegal, Barrister
Category: Law
Satisfied Customers: 7868
Experience: Barrister at law
plclegal and 2 other Law Specialists are ready to help you

Thank you again for visiting JustAnswer, please do let me know if you have any additional questions in the future. I am also happy to answer any new questions on other topics that you may have, you can request me by putting “for PLCLEGAL” at the start of the new thread. Best wishes, Peter

Customer: replied 7 days ago.
For PLCLEGAL. Thank you for your advice Peter. We will not be liable for IHT and, as a tight-knit family, trust our children to do the right thing! We intend to leave our property jointly to our three children and I thought that gifting now would make things easier for them, with only one property transfer transaction instead of two. Does this transaction require signatures (one of our daughters lives in Wales and it would be difficult for her to visit a local Solicitor)? Alternatively we could transfer the property to one or both of our children who live locally and trust them to follow our wishes. Do you still recommend including a Gift of Property clause in each Will as the safest option? Best regards, ***** *****

I would suggest that the will route is the clearest and safest option. Even the most tight knit families can fall out, and if you leave it up to them when you have passed away there is no guarantee that they will all still get on!

It also means that the decisions are already made, and there is no room for argument - better all round.

As I said, I would not be concerned about the property transactions having to be multiple, the process is not complex.

Customer: replied 7 days ago.
Many thanks, Peter.

My pleasure.

Customer: replied 6 days ago.
plcLEGAL. As tenants in common, will she be liable for inheritance tax if I name my wife as sole beneficiary in my Will? Would it be better to change ownership to joint tenants?
Customer: replied 6 days ago.
For plcLEGAL. As tenants in common will my wife be liable for IHT if I name her as sole beneficiary in my Will? Would changing our ownership to joint tenants be more appropriate?

Have a look at the article here - this will help explain the IHT rules for married couples:

https://www.which.co.uk/money/tax/inheritance-tax/inheritance-tax-for-married-couples-and-civil-partners-a1vvf7h17jpc