Family property nightmare

[lookslikeabombhitit]

Any property advice please? It's long and complicated I'm afraid but don't want to give too many details as I think I'd be easily identified! We're trying to access free legal support through clinics but are just trying to assess what to do in the meantime...

DH had a house signed over to him 20 years ago by grandparents. He is the only person on the deeds. There is no mortgage on the property and no conditions attached to the deeds that we have accessed on the land registry. We don't live in the house. Family do. No financial benefit is taken from the house by DH. A relative (occupant) now wants to be on the deeds and has produced a TR1 for DH to sign...

My question is- does being the sole person named on the deeds mean you are the owner? Are there any documents (i.e. a will or anything like conditions/terms written by a solicitor) that would supersede the deeds and force DH to sign it over? There is no trust set up about the house to our knowledge- is there a way to find out if there is one? We haven't seen the grandparents will- if the grandparent said in their will they wanted the house to be signed over to relative would that be enforceable as they're not on the deeds?

We're not trying to be grabby! This is a really horrible situation to be in as there's no "benefit" for us in any of the scenarios we can think of, it's created a massive family drama and has the very real potential of us being left destitute if DH signs this bloody house over to keep the peace as we lose the only thing keeping us afloat at the moment (UC- house currently eligible for disregard as a capital asset due to occupants, if he signs it over it'll be seen as deprivation of assets/capital).

You think wrong. Property that is gifted or sold at an undervalue is taxed assuming it was told for full market value.

It sounds very much like the Grandfather gifted the house to your DH and possibly stated his wife, your DH Grandmother could live there for life. Tell your DH do NOT sign the transfer form. If he signs the form he gives the house away and becomes liable for CGT. It sounds as if the other relatives living there realise once the Grandmother dies they have no legal way to live there so are trying to pressure your DH into gifting it to them. After the Grandmother dies, your DH could ask other relatives to leave, by eviction if necessary, and you could live there if you wanted to or you could charge other relatives rent.

Thanks for the capital gains advice. Never heard of it (we rent, can't afford a house and yes, we have DC and are perpetually living hand to mouth...). I've just checked the govt calculator and it'd cost 45k in CGT. We've barely got 50p in the bank and no savings... 😂🤦🏼‍♀️

From a legal POV, CGT would be payable from when the recipient ceased to live at the property to when the property is sold or gifted to someone else.
So, for example, assume the OP was 10 when the house was gifted to him and the house was worth £75k. He continued to live there until he was 18. By that time, the house was then worth £100k. CGT will be payable on the increase in value from him being 18 to when he sells / gifts it to someone else. If at that point the house is valued at £200k, the OP would pay CGT on £100k less his allowance (around 6K) and sale costs.
If, however, he moves back into the house, there will be no CGT to pay.

To clarify this part:

If, however, he moves back into the house, there will be no CGT to pay.

He cannot avoid CGT on historic gains by moving back. The CGT is still payable whenever he sells or gives it away.

Is there any reason you haven't got cf mil out on her cf arse and live there yourselves? With the dgp still in...

There is no CGT on your main property... and the OP says that they rent elsewhere, so there should be no CGT.

However, if given to the owner by grandparents and one of those grandparents is still living there - with a right to do so, then it was a gift with reserved rights and may give rise to IHT instead...

There is so much bad and incorrect advice on this thread and this post is such an example.

There is something called principal private residence relief, which means that you don't pay CGT on your main home, but that only applies to the time when you are living in it as your main residence.

The holder of legal title to this property is also the beneficial owner. He hasn't lived in the property for a number of years. As previous posters have pointed out, any gain in the value of that property since moving out will be taxed as a capital gain.

There are complicated rules that mean that some months or in some cases up to 4 years of not living at the property can be counted as part of the CGT-free perid of ownership but to say that he didn't own another property so none of the value of the property is subject to CGT is so wrong.

Anyone insterested can look here https://www.gov.uk/tax-sell-home/absence-from-home

I also believe the person acquiring the property would be expected to pay full Stamp Duty on the basis of the property's market value too.

I very much doubt there are any legal documents. They've just printed a TR1 themselves and filled it in.

From the outside it looks like your DH's grandparent clearly signed it over to your DH for this very reason.

You could look up the grandparent's will and probate online and download a copy if you can. As a PP says, any reference to the property being left with the other grandparent as life tenant is a moot point as he didn't own the property at the date of his death, but it might give an insight in to his intentions for his estate as a whole.

Not that it really matters. The property is your DH's to do with as he wishes which is, presumably, to allow his remaining grandparent to live their for the rest of their life.

I can't find anything to suggest that if they've lived there and paid for maintenance that they're entitled to ownership, but alienating them does potentially increase the risk that they demand that you pay for any maintenance on the property yourself, as you are legally required to do as landlord - Link

He would only pay CGT if he sells it though.

If Grandfather had a proper Will this will be a matter of public record by now and can be downloaded for a small cost. You just need a few details about Grandfather.
However, if the house was transferred outside of the Will and with no mention of it or any conditions pertaining to it then I think the answer to your MIL is No and that she needs to consider her future as once Grandmother has died the plan is to sell the house.
Even if both grandparents were joint owners it must be presumed that both agreed at the time to transfer it. And your DH knows the reasons for that (I suspect to protect his inheritance from his own parents). The biggest honour you can give Grandfather is to accept his gift gracefully and use it to secure a happy future for your own wee family.

OP, your husband owns a house.

He is entitled to either live in the house or get rent for the property, either a below market value rent from family or market value rent by renting it on the open market.

His family is putting you in this position by not paying you rent. If 4 of them live in the house they could surely afford to make some sort of payment each month to your husband. £400/month? How much of a difference would that make to you?

How much is the house worth if it was sold? Take that amount, deduct possible CGT and that could be your amount of savings.

What has your MIL said about her going on the deeds? Does she want 50/50? She’s basically trying to take a huge amount of money from your husband.

You’re not being grabby by not singing away a property you own!

Not true on stamp duty. There’s no SDLT on gifts but there is capital gains tax on the property (even though it’s the only one OPDH owns) as he doesn’t live there.

Don’t sight the documents though. If there are other legal documents like the family member is talking about, why do they need the TR1 signing.

Tell them you’re happy with the current situation, and if they need anything to change then they can appoint a solicitor and pay for your legal advice and you can have the discussion via solicitors. Otherwise everything stays as it is.

**sign

For the millionth time - no.

FFS read the thread. CGT is payable when someone transfers a property out of their ownership. It can be by sale for full value, at an undervalue, or by gift. If not a sale at full value the property is taxed as if it had been sold for full market value.

No you cannot will a lifetime interest in someone else's house which is what they'd essentially be doing. It's like a renter making a will saying their relative could live in the house they rent for their lifetime, if you don't own it you can't will anying in relation to it. If DH signed an agreement to a lifetime interest for said relative at the time that could be a different matter.Tell relative to produce their documents and you'll get them checked by a solicitor. It really doesn't sound like they have anything or they would have produced it already. Your DH should not sign anything, neither signing the house over nor make any agreement said relative can remain their after Grandparents death.

Is there any reason why your not liv8ng in the house? Surely you boot the parasites and keep granny?

Rude or what!!!
If he does nothing with the property, he will not pay CGT.

CGT would be payable from when the recipient ceased to live at the property to when the property is sold or gifted to someone else

Did you miss this bit from my post? 🖕🏼Gifted meaning the property is transferred out of their ownership.

Sneaky - trying to get your DH to sign a Transfer that would take him out of the picture completely.

You can get a copy of a Will for £1.50 by using the gov.uk Find a Will service.

Sit tight and don't sign anything without getting advice first. At this point you can bat the TR1 back to her with a firm "I don't think so." and put the ball in her court. A good solicitors will not pursue this for her without checking the facts.

It's his house. The fact it was signed over to him for safe keeping shows the original owner foresaw something like this.
Just say he can't do it because of the UC complications. Never sign it over.
What he could do evict them and sell it. That might feel a bit extreme.
See it as your children's inheritance.

Rubbish

What grounds does your mum claim to have claim to this property now?

Oops! I stand corrected - apologies. I was getting muddled with CGT.

CGT is definitely payable if the property is disposed of using the market value of the property (HMRC link)

OP - the original purchase price of the property is the deemed value at the point that it was given to your DH, not £nil. It does mitigate the tax liability somewhat, but to transfer the property over to his DGM now would mean he'd have to pay to do it.

It sounds like the person urging you to sign the TR1 has their own agenda - i.e. maybe they already want to gift their part ownership on to another third party (one of the other occupants maybe?).

Sounds like one of the other occupants might be similarly applying pressure to the grandparent.

As everyone says, please do NOT sign anything.

The Land Registry offer a free email property alert service - your DH should sign up for this n case his not so D M tries to forge his signature on the TR1. It will email him if there is activity on the property and he can then call the fraud line at the Land Registry and stop changes being made to the registered title.

https://www.gov.uk/guidance/property-alert