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Original poster

Signing House over to DC

34 replies

TrustHouse · 10/04/2019 10:32

Does anybody have experience of doing this?

I have one adult DD and have a small mortgage left on my house. It is nowhere near inheritance tax territory. We are talking under £100k.

Once I pay my mortgage off I would like to sign the house over to DD.
Or put it in trust for her, not sure how it works. We will still be living in the house. The property is in my name only.

Will this cause issues in the future if she wants to buy a property herself?

What would be the issues if I just added her onto the deeds?

I just want to ensure that whatever happens to me, my DD will keep the house.

Any advice would be appreciated.

OP posts:
Collaborate · 10/04/2019 13:13

Plenty of reasons not to do it. I can't think of one reason why you would.

Some of the reasons why not:

  1. If the property is sold it is likely your daughter would have to pay CGT.
  2. If your daughter has debts her creditors might try and enforce them against your property.
  3. If she's made bankrupt you would all lose the property.
  4. If she gets divorced the fact that she owns your home might means she gets less of the other assets.
  5. You would have to pay her rent.
  6. The Local Authority, when assessing your eligibility for financial assistance with care home fees, might well treat you as still owning the property.
  7. If the reason for you doing this is to avoid care home fees, and your daughter knows this, you may all be committing an act of fraud (as explained to me today by a solicitor colleague specialising in this area when discussing another case).

There are plenty of other reasons but I haven't the inclination to devote any more time to such a query. If you want to make sure your daughter gets it on your death, make a will. If you think the rest of us ought to fully fund your care home fees while your daughter owns your house , there are rightly laws to prevent this.

greenchilly123 · 10/04/2019 13:19

She would not be classified as a first time buyer if she has any other properties in her name, which means that when she tries to buy her own home she won’t be eligible for stamp duty relief

Redglitter · 10/04/2019 13:24

Don't do it. There was a case in the media recently where a couple did this. Several years down the line their son decided to sell the house. There was nothing they could do. He sold it and swanned off with the money leaving them homeless

IWannaSeeHowItEnds · 10/04/2019 13:26

If your DD gets divorced a spiteful ex can try to claim a share of your house as a marital asset.

tallbt · 10/04/2019 13:29

If the motive is to avoid inheritance tax this doesn't work if you are still living in the property (unless you pay her a market rent)

HollowTalk · 10/04/2019 13:40

Why would you do this? I don't understand.

How old are you?

HollowTalk · 10/04/2019 13:41

Are you living with a guy? Are you married? Is her her father?

If you died, wouldn't you want him to be able to stay in the house?

Original poster
TrustHouse · 10/04/2019 14:55

If the motive is to avoid inheritance tax
No, as I said the house is well under the threshold.

I am married, not DD's father. If I died DH would receive a substantial lump sum for him to buy his own place.

I have been paying my mortgage for 20+ years and nearly done.
Only recently married, my DH has no interest in the house.

I had my will drawn up 'In contemplation of marriage' detailing DH and mine preferences.

My DD may not even want to stay in the family home and may prefer to buy something more suitable.

I'm nearly 50, so I suppose I'm trying to think ahead. I've upped my pension in work and want to address any issues that may come up before I'm an OAP.

But as for all the reasons Collaborate has stated above, it's not as cut and dried as I first thought.

Thanks for the responses, it has given me a lot to think about.

OP posts:
RedHelenB · 11/04/2019 08:22

I know someone who did this due to care home fees. Her son is living abroad. I did wonder what would happen to them if son got into debt. They both worked nmw jobs and wanted to be able to leave him and his grandson something.

HotpotLawyer · 11/04/2019 08:31

Where would you and your DH live?

HotpotLawyer · 11/04/2019 08:35

Oh, sorry, you said you would still be living in it.

Whatever your DH says now about having no interest, if you marry and subsequently divorce he could make a claim on the house.

SlidingDoor · 11/04/2019 08:36

If you are under the inheritance tax threshold then I do t understand d what you are trying to gain. If you want her to have the house when you die hen state that in your will and discuss it with her and your husband. No need to do anything else.

HotpotLawyer · 11/04/2019 08:46

Losing half the house in a divorce?
If Op died her DH could stay in the house and make Dd homeless, potentially?

What are you wanting to achieve by signing the house over, OP
and
What are you wanting to achieve by marrying?

In your shoes it is the marriage I would question, but I am always wary of women who have fought the odds (gender pay gap, maternity leave etc) to gain property ownership puttting that property into a partnership as an asset of the marriage.

SosigDog · 11/04/2019 08:49

I may be wrong, but I believe that if you’re living in a house owned by your daughter she will get taxed as if you’re paying rent at the market rate? Even if you’re not paying any rent.

Applesbananaspears · 11/04/2019 08:56

Take legal advice. There’s a way of doing this so that it goes into a trust for 7 years and then transfers over. I have no idea of the ins and outs but you can do it and do it legally.

Original poster
TrustHouse · 11/04/2019 09:11

Whatever your DH says now about having no interest, if you marry and subsequently divorce he could make a claim on the house.

I totally agree, the Will 'In Contemplation of Marriage' is only preferences. It is never set in stone.

I'm going to take heed of the issues you have all brought up and take legal advice if I ever go down that route.

What are you wanting to achieve by marrying?
I love my DH and he is a good man. But due to past experiences nothing stays perfect, so I will always be cautious. As everybody should be.

OP posts:
Erksum · 11/04/2019 09:20

.

Collaborate · 11/04/2019 09:55

My work here is done.

HotpotLawyer · 11/04/2019 13:11

"may be wrong, but I believe that if you’re living in a house owned by your daughter she will get taxed as if you’re paying rent at the market rate? Even if you’re not paying any rent."

You are wrong.

OP: property is treated differently in a will as in a divorce. Whatever you put in your will will not influence what happens in a divorce.

Yes, you could transfer your house on the basis that you do not want it to be vulnerable by your forthcoming marriage, and as long as you survive 7 years or more, your Dd should be fine in terms of iot being claimed for your care fees. BUT that is where the need to demonstrate that you have been paying her rent would kick in. AFAIK.

Bt the main point is, caution is your friend and you should take financial and legal advice from a professional before doing anything major (including marriage). Hopefully this thread will give you a basis from which to ask questions.

Erksum · 11/04/2019 13:45

Great list Collaborate

OP, you just can't predict the future. I'd hang on to the house and double check your Will is watertight and that your house will definitely go to her once you die. We don't know what will change with tax and inheritance laws over the next few years let alone over the rest of your lifetime.

I think it would be a mistake to put yourself in a potentially vulnerable position.

effiehabb · 11/04/2019 13:47

Do not do this op!

HotpotLawyer · 11/04/2019 14:03

And don’t get married!
Getting married is essentially giving half your house to your DH.

Original poster
TrustHouse · 11/04/2019 14:06

I only thought of it as a friend was 'gifted/trusted' a third of her parents home many years ago (along with her siblings). She was still able to get a mortgage and it didn't come up as an issue during her divorce.

I'm not going to do it. In hindsight, would create problems for DD which I certainly don't want.

Thanks everybody for your responses.

OP posts:
Teaonthebedsheets · 11/04/2019 14:08

Your daughter will pay a 3% surcharge in stamp duty rates on future house purchases.

Loads of potential downsides and no upside I can think of as PP have said.

Original poster
TrustHouse · 11/04/2019 14:11

There are far too many risks that I hadn't even considered.

OP posts: