Transferring your home or other property to relatives
Guidelines for consideration when seeking advice as to the advantages and disadvantages of transferring your home or other property to relatives
Advice will of course vary according your individual circumstances but we must ensure that you fully understand the nature, effects, benefits, risks and foreseeable consequences of making such a gift.
Possible benefits
- Saving of Inheritance Tax.
- Avoiding the need to sell the home to pay for costs of long-term care thus securing the family’s inheritance.
- Avoiding the value of the home being taken into account in means testing for other benefits or services.
Possible risks
- The value of the home may still be taken into account under the anti avoidance measures in relation to means testing. Local authorities are now employing staff to investigate elderly people who go into residential care after transferring their homes to their children. Even if this is done as part of a marketed scheme based on trusts, a council can disregard the transfer for means testing purposes if it decides that the main purpose was to avoid the costs of long-term care.
- Following transfer the Capital Gains Tax Owner Occupier Exemption may be lost.
- You may never need long-term care (it has been estimated that less than 60% of people aged 75 to 85 need residential care).
- The beneficiaries of the gift may die suddenly without making suitable provision for you.
- The home may be lost on the bankruptcy, divorce or death of the relative to whom it has been given.
For the above and indeed other reasons your solicitor will wish to highlight the risks of any such benevolence and indeed using schemes which may not highlight the risks involved.
Director & Solicitor
Email Ian through the Contact Us page