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Original poster

Does everyone do this ?

32 replies

DoreenCorkhill · 05/09/2026 16:24

Strange question I guess but my sister asked me last week if my husband and I had signed our house over to our children yet ( DH is 65 in a few weeks so wonder if that prompted the question). She advised me she and several of her friends had signed there homes over to their children in a bid to avoid inheritance tax .
A quick google suggested to me this was not a great idea with more negatives than benefits but just got me wondering am I missing out on some new legislation or reform ? I know IHT had changed a bit bit - but to me it’s like any other tax you have to pay it .

OP posts:
Sparrowsandbudgies · 05/09/2026 16:40

I would never do this. I don’t know anyone who has done this. It leaves you very vulnerable. You never know if you can ever fully trust your children.

Hatty65 · 05/09/2026 16:48

I'm not intending to do this. I would feel insecure knowing I'd handed over the only thing I have in the world that is stopping me being on the streets, even though my adult DC are lovely and I'm not expecting them to do put me out.

Having said that, DHs Mum did do this. We didn't know (although I wonder how DH managed to miss the fact that she told him back in the 90s apparently that she'd transfererred her bungalow into his and his siblings names).

She sold it last year as it was getting too much for her and her tenants had moved out.The money was divided between the DC. She had moved in with her DD during Covid and has basically been there in a granny annexe ever since. She is over 90 now and still going strong, but I'm in awe that she did that, even though it has obviously worked for them.

Also, we had to pay capital gains tax on it, because it counted as a second home. If she'd just left it to them in her will I'm pretty sure they wouldn't have had to pay IHT. It sold for less than £200k.

I don't want to.

UniquePinkSwan · 05/09/2026 17:09

Absolutely not

FlorenceBlack · 05/09/2026 17:15

If the adult child got divorced the property could be taken into account

TheSmallAssassin · 05/09/2026 17:24

Sounds bonkers to me!

OneOpalOwl · 05/09/2026 17:30

If they continue to live in it, then they need to pay rent to the children or it is a Gift With Reservation of Benefit (GWROB) and essentially still part of their estate until they move out.

Most married couples will have nil rate bands of £1m so most don’t even pay IHT. Something like less than 5% of death estates pay!! Although the rules to bring pensions into IHT from April 2027 might change that!

If you think you’ve got assets of more than £1m it’s worth taking proper advice tbh.

Octavia64 · 05/09/2026 18:24

HMRC know about this and it’s not a good tax avoidance scheme (if it ever was).

if the parents keep living in it without paying rent then it’s pretty much treated as if it never happened

Cotopaxi · 05/09/2026 18:27

This is not the clever-clogs tax dodge that people think it is.

Gateappreciation · 05/09/2026 18:28

No, not done that.

lippylip · 05/09/2026 18:46

I know lots of people with estates work more than 1m & none of them have done this. It’s a minefield.

What they have done is access money to help their dc onto the ladder etc

moggiek · 05/09/2026 18:59

FlorenceBlack · 05/09/2026 17:15

If the adult child got divorced the property could be taken into account

This 💯

toastycold · 05/09/2026 19:03

Absolutely no way would I do this. I’m 65.

DontCallMeBaby · 05/09/2026 19:06

My dad’s not done it and he tends to know what he’s doing financially! Though in the context of another financial discussion he had realised that if I co-owned a house with him that would make me a second-home owner with knock-on effects. So doesn’t sound great …

BeardySchnauzer · 05/09/2026 19:09

Yes HMRC are fully aware of this little dodge! Plus deprivation of assets for care home fees.

there was recently a case that went to court because the kids were trying to evict the mum 😮

Mumtobabyhavoc · 05/09/2026 19:12

Speak to a financial planner.

joelcreasey · 05/09/2026 21:30

FlorenceBlack · 05/09/2026 17:15

If the adult child got divorced the property could be taken into account

My auntie did this then my cousin got divorced…

She thought she was being really clever but it was a total nightmare in the end.

She hadn’t been paying rent either 🤦‍♀️

Original poster
DoreenCorkhill · 05/09/2026 22:36

Good …. Thanks all just as I thought . Well dodgy . Everything I knew pointed to that conclusion but my batshit sister always makes me feel as though I’m stupid so thought I’d better check .

OP posts:
GrillaMilla · 05/09/2026 22:44

My friend's husband is an only child. His parents signed their house over to him many, many years ago.
They've now passed away and he's sold it. No issues.

lordbaddingham · 05/09/2026 22:47

if it was so straightforward to avoid inheritance tax everyone would be doing it. It's not.

Shinyhappyapple · 05/09/2026 22:55

Absolutely no intention of doing this. Plus, it would depend on the value of the property and any savings. Not everyone pays inheritance tax.

Copperoliverbear · 05/09/2026 23:08

Yes lots of my family have done this. But I suppose it depends on your situation.

Topseyt123 · 05/09/2026 23:32

People who do this seem to think they are being very clever, but it can be fraught with pitfalls.

For example, adult children can get divorced and the property may then end up in the marital pot as assets are divvied up.

Then there is the deprivation of assets law just waiting in the wings.

There are various legal trusts that can be used and should be considered.

Pollenaha · 05/09/2026 23:39

We're planning to sell our family home and downsize, and pass on the difference to the dcs (when they are much older - they are primary aged now). I wouldn't sign over a property that I was still living in, as it would be a gift with reservation.

I don't know anyone who has done this. My parents own their home in their own names and we don't see a need to sign it over to me or my siblings. We all own our own homes.

Ohdearnotthisagain · Yesterday 00:12

Insane thing to do. Leave your sister to crack on. I suspect she won’t be interested in logic.

Nugg · Yesterday 00:14

No feckin chance

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