Property ownership

[Regretsandregrets]

I am divorced and working full time at the moment.My daughter lives with me.I am the sole owner of my house.I am thinking of adding my daughter as a tenant in common with a 50% share of my house.
Are there any tax implications? Will it count as a gift from the date of tenancy?
If I need to go in care in future how will this change affect the costs.I am active and in good health overall just trying to give some financial stability to my daughter.
My daughter is 29,working full time and is the executor and sole beneficiary named in my will.Any guidance will be appreciated

Do you have a personal pension pot?
A better way maybe to make her a beneficiary of the plan which falls outside the estate on your death.
I would be more inclined to save up & give her a deposit for her own house.

Thanks all, for highlighting the various aspects of the issue.
Looks like dying early without requiring care is the best option financially as she can then inherit everything as the sole survivor with a legally binding will in place.
Will look into it!!

@Hollachica
I have membership of an Occupational Pension scheme and planning to get my lumpsum next year and work part- time after that...another 5 years before State pension pays out...no other personal pension but can you please tell me more about it..
Might be a bit late for me but can point my daughter in that direction.

I'm sure doing this would make her exempt from any benefits first time buyers receive- stamp duty/criteria for certain types of houses she may want to purchase later on, etc. Also, if she gets married and that doesn't work out, her partner will be entitled to half of what she has- including your property (I think). Personally, I wouldn't do it. Yet.

• Again, not sure about deprivation of assets.I am 61years old, fully active and independent with minimal health issues.Any financial planning now surely would not count as deprivation of assets. Would like to learn more about these issues before I act on my idea.*

Please speak to an accountant. It could save you thousands. Literally.

@titnomatani..
Sound advice..
Will look into it.
Thanks.

Speak to someone who specialises in this not an Internet forum

You also need to consider what would happen should your daughter ever need to claim benefits, for instance due to disability or if she has children or finds herself out of work. If she lived elsewhere by that point, her share would count as an asset and disqualify her from claiming anything.

Seems so unfair to me that DC in a family with two parents get a £650000 share of an estate without paying IHT when DC in a single parent household get £325000. One of the most unfair taxes around.

Going to put it out there that this plan won't remove the value of the 50% you give away unless you move out the property.

Google Gifts with Reservation of Benefit. It's tax avoidance to prevent people giving away their homes but remaining there to get it out there estate.

Effectively until you move out, the gift doesn't take effect and is if you still owned it for IHT purposes.

There are also horrendous CGT consequences as well, but if IHT is your main aim I'll just tell you it's a no-goer.

@alarae
Thanks for re inforcing the general message.
I am aware of Gift with reservation of Benefit but my understanding(obviously wrong) was that it applies when you gift your property to your child/childern and continue to live their without paying the market rent.
I wasnt aware that adding a child or someone else as tenant in common comes under the same rules of gifts.

@leucozadeaids32..
Yep..
With a £650000 allowance i would not be looking at other options.

@MrsMaiselsMuff..
Disqualification from claimimg benefits did not cross my mind.Thanks for pointing it out.
I have gathered very useful information from my friends on this forum and it will help me in looking at alternatives like setting up trusts etc. something that I struggle to understand and was trying to avoid.
I think need to sit down with an accountant and/or a solicitor with expertise in estate planning.

If you give half the house to your daughter and need care in your old age, how do you propose to fund your care?

The other half of my house and pension income.
Obviously, i dont know how much money will be required if i do need care.
But then, all other options have same limitations.If I downsize and hand over some spare cash as suggested by some it will still deplete the total amount I am worth at the moment.
Where do you draw the line? What is right and acceptable and what is unethical or deceitful?
Or shall we just let the young ones fend for themseleves without any support?
Its common practice for parents to help kids with their house deposits.Is that OK?
How do parents know they wont need that money later in life to fund their care?
I was just looking at one option and have been enlightened by other members and have no intention of following through with it but how does anyone know how they will fund their care when planning any financial support for their childern?

You need a solicitor that specialises in Estate Planning.

We did this recently. It cost £3k which included a long report with lists of options, 2 wills, and several planning meetings, however there were a few properties involved and we have two unmarried children so rather complicated.

You got remortgage your property (Obviously not with some dodgy equity release scheme) and give the money to your daughter (if that’s what you are trying to achieve). You should use it to reduce the value of your estate below the inheritance threshold.

Should not got

@forensicAccountant...That's one way of doing it but I may not get a mortgage now at the age of 61 and planning to work only part-time from next April.
Certainly worth considering.

@Mosaic123..
That is the next step i think.
Should not be as expensive coz not a great deal to consider- just 1 property and some savings.
Probably easier to leave the property alone and encash some savings and gift her some cash now and encourage her to stay with me and try to save for a bigger deposit over the next 18-24 months.

Hi OP, I know you've mentioned setting up trust above, and I would strongly advise against it if your DD is the sole beneficiary of your will as that also can be perceived as deprivation off assets (if the trust wasn't in place your DD would inherit the house anyway) also if you put her on the house deeds as tenant in common the house would still need to go through probate process as you both would own a separate share, and it would not pass automatically to the survivor. Trusts are great when you have a complicated family arrangement but are being heavily misused in recent years as a way of avoiding paying for care. Please see a solicitor who specializes in this area

@soontobemrs91..
Trusts just sound too complicated to me anyway with the setting up costs, tax implications and the sense of losing control over your assetts.
I think some cash now and some later when I downsize might be simpler and as you rightly say that she will inherit the property anyway if I die before downsizing.
Thanks for your advice.

Capital gains as well. If she moves out she will be eligible for capital gains when you sell or if you die and she sells