AIBU - inheritance sad story

I’m not a tax lawyer or accountant but I’m fairly sure that transferring a house into anyone else’s name(s) and continuing to live in it without paying market rent makes it a Gift With Reservation Of Benefit for tax purposes and therefore the property is liable to IHT on the death of the donor.

She could do it if he were a tenant as well, though I suspect that's a moot point since nothing about this says formalised legal agreement and rent. But yeah, marriage to someone who has no legal interest in a property doesn't create a legal interest for the spouse either.

He doesn’t own the property so she can’t do this.

Grandad is reaping what he sowed. He was an adult of presumably sound mind when he did all this.

This is only an option if DGD has a legal interest in the property, for example if he has a proper formalised tenancy. Do we really think that's happened here?

She moved into a house that she did not own 25 years ago. Her partner also did not own it. She had 25 years to consider how she would house herself if the owners sell the house. Why should she get to live there the next 25 years (rent free?) - possibly outliving the people that do actually own it?

God so often clients come to see me with the bright idea of transferring their main residence in their lifetime. It’s almost always a terrible idea for so many reasons. No reputable solicitor would recommend for the average family.

the new wife should register and interest in the property. This might stop them selling it. She should be allowed to live there for the rest of her days. 25yrs is not insignificant.

Yes, my Dad has talked about "people" who transfer property to avoid IHT and concluded that the only way to do it is to pay rent for the privilege of living in what they still see as their own home.

So, the GF's estate will have to pay the IHT and the two older children own the property.

So an even bigger shit show. My dad broached this with me back in the 1980's I was advised not to by solicitor thank goodness.

I'd guess Grandad didn't tell his new wife that he'd just signed his house over to his kids when he first met her.

For all we know, wife was perfectly fine thinking that she would inherit and then pass it to her child.

Or maybe she did know and they have been squirreling money away for the last 25-30 years, for her and the daughter, and will not be destitute.

So many children of first marriages get absolutely shafted and the second family are perfectly fine with that.

We just don't know.

If this is real, the only people to benefit from the coming shit storm will be the lawyers who sort out this unholy mess.

Looks like the OP is either the 6th child or the current wife.

Otherwise how would a grandchild know that her grandfather had been to a solicitor to try to change his will / seek legal advice on how to take back a property gift from the OPs mother? 👀

Bollocks to that - the wife could live for years after his death and the dc would still have to pay to maintain etc

S/he should have made provision for the time after he passes / and for daughter - They've had 25 years rent free

Hopefully that will be the case. I was responding to the PP who seemed to think the wife had legal rights in the same way as a tenant.

She doesn’t unless she can prove she’s been paying rent, which could be seen to form a contract, to either of the owners in the absence of a tenancy agreement.

I should imagine the GF only transferred the house to 2 out of his 5 DC because they were the oldest, and maybe the only adults, and he trusted they’d share with their younger siblings.

Alternatively It may have been more costly in legal fees to get all 5 names on the deed if they were all adults.

Because the CGT tax would be due on the transfer at the value of the asset at that time, regardless of whether they receive any money for it.

So, if they give the house back to GF they lose the asset they currently own and have to pay up to 24% CGT on any increase in value since it was originally transferred to them.

Coooeeee OP

There is also a default to drama- the mother and daughter may very well just leave themselves with no conflict. There is no need to be talking about eviction and gas safety and rent etc

Would the children of a good father behave in this way? Most likely not.

Probably the 2 kids he could trust not to kick him out and he was right. He probably knows the other 3 would happily see him homeless.
Late 1980's people were very aware of iht & care costs, I remember my dad talking to me about it, I was early 20's with my first mortgage, solicitor advised me against it. Dad also wanted it in my name so mum couldn't take half if they divorced. Imagine that shit storm!

I don’t know why so many people are raising CGT- it’s very likely the mother and other sibling are well aware of this and don’t have any concerns. Wouldn’t most people be willing to hand over a small % of the value in exchange for a FREE THING?! They’ve got a house for nothing 😂

Owners don’t need a court order to evict. They can literally go in, change the locks and remove personal effects in this situation as there is no tenancy agreement, no rent paid to form a contract. Police can be called if there is a breach of the peace when they are told to leave.

OP said house was paid off before GF remarried so nothing could be claimed to have been paid that would give the wife an interest in the house.

Wife and her daughter are ‘excluded occupiers’, they should be given ‘reasonable’ notice which is at the owners discretion and in this case can be the two years the owners have very reasonably agreed to give after the GF’s death.

Double post

If they give it back to him now, new wife will inherit and ultimately her children. Your mum and her siblings will get nothing. Plus the tax issues.

He's has 25 years to sort this out, if this (very odd) arrangement wasnt his true intention.