Making over my house to only child ?

nonnie is right We already own all our assets 50:50 and are about to change our wills to this effect, having recently given our DDs large sums to buy property.Just have to try and live 7 years....Our individual pensions, remaining cash and house would pay care home fees so not too worried about that aspect .You would certainly need to bear that in mind as you say your actual income isnt high .
At present we have a trust set up into which their half would go on the death of the first of us , for the benefit of DDs and the survivor .You might be able to do something like that for your son and any putative GCs ?excluding a putative DiL?

Here in the States we have a thing called a "life estate" that you can get if you put your home in your DD's or DS' name. It means that they legally have to let you continue living in your home/can't kick you out on the street. I don't know if you have anything similar in the UK.

While I get what some posters mean about our taxes paying for social services, I also understand a parent's wanting to keep their beloved home in the family. So I get their not wanting their AC (adult child/ren) to have to sell it to pay the IT or lose it to Social Services to cover the cost of nursing care. I also get their not wanting a huge IT to fall on their AC.

So I see the point of your giving your home to your DS, Greymary and paying him the market rent. But I'm glad you realize there is "much to consider" and I hope you consider it carefully. Best to you!

I heard of a couple who gave over their house to family. They ended up living in their bedroom.
I have heard umpteen horror stories including folk who worked all their lives ending up on the street, due to trusting 'family'.

The family home has, generally speaking, been paid for by taxed money and other taxes are paid when purchasing. Any improvements have been paid for with taxed income and subject to VAT.

Some homes have increased massively in value in certain areas which brings them into the IHT band, but I still wonder if IHT is an unfair tax - or perhaps it should be on a sliding scale like income tax.

That does not help Greymary with her dilemma though.
Personally, I would not make over my property to a child, too many pitfalls. The worst that could happen would be that your son would have to pay IHT on anything over the limit of £650,000, have to sell the cottage and buy somewhere less expensive. Unless he wants to live in London this should be perfectly possible.

Whatever!

to JJ50, if you are still living in the property and not, as MOnica says, paying them a full market rent (which they are declaring for income tax purposes), the house will be treated as a failed gift for inheritance tax purposes and still be counted towards the tax bill.

We could afford to pay our own care charges, if necessary, without recourse to selling the property.

If you are still living in it I hope you are paying your DD the market rent, otherwise Social Services will still expect it to be sold to pay for any care you need. They will say you made the house over to your daughter to avoid care charges - and that makes the transfer void.

We have put our house, which we bought four years ago, in the name of our eldest daughter. We asked the others if they wanted it in their names too, but they declined.

Taxes pay for public services and are part of our contribution to the fabric of society, and big multinationals which make millions of pounds from economic activity in the UK should pay a proper amount of tax on profits generated here (see "The town that took on the taxman" on BBC iplayer for a brilliant summation).

However, as Churchill said nearly a hundred years ago, every citizen has the right "so to arrange his affairs as not to attract taxes ... so far as he can legitimately do so." There is a huge difference, in my opinion, between tax evasion (illegal) and tax avoidance (legitimate use of legislation and rules)

Ooop forgot- on the other hand, with properties in the UK having gone up massively, crazily even, in price- our inheritors find themselves inheriting properties worth a lot of money, without themselves working hard for this themselves. Is it not fair they have to pay tax on this large windfall?

Wilks- I agree with you. We all want a great health system, and excellent education system and social support for those who need it, excellent infrastructure and pollution control, etc- and we have to realise that comes from OUR TAXES - WE pay for them all.

And yet, I also agree about the massive injustice vis-à-vis Amazon, Google, Starbucks - who are allowed to massively avoid paying fair tax- whilst at the same time destroying local businesses (bookshops, independent cafés and restaurants, toy shops, etc, etc, etc) - and of course the 20% tax and more they have no choice but to pay.

I bet Google and Amazon don't have to worry about tax implications! So unfair, when you have worked and saved all your life and face losing so much, unlike those who hold out their hands and get what they want with little effort. I'm not mean, but sometimes it makes you feel that looking after yourself doesn't help in the long run.

Our taxes pay for public services so should we try to avoid paying them? Just saying.

Well it certainly is a minefield this Inheritance Tax business isn't it.
grumppa - I'm not trying to evade paying tax in that sense. I get a portion of my deceased husband's pension (which he paid tax on when working) and I now am taxed on that. For a few years I had a little partime job - cash in hand really - but I declared that for tax.

All I have to leave my son is the family home. Because of the huge increase in property values during the last 20 years (suddenly people were buying 'properties' to make a profit, they were not buying homes) I, like so many others of my age, have larger assets than we ever imagined.

My disposable income is small, enough to live, manage and repair an old property which is my home, my sanctuary.

I expect to die without enough left in the kitty to pay 40% IT tax due on current property values. I have lost dear friends whose children were forced to sell their family home just to be able to pay IT.

If it is possible to legally avoid tax then yes, I will do it. My son lives in rental property atm.

Lots of advice here for which I am sincerely grateful. Always good to get other people's views, experience and hear how people have dealt with the problem.

Thank you all, much to consider.

We have as clause in our wills if sons die before us their share of our estate passes through bloodline so bypasses dils not that we don't have a good relationship but no one knows what may happen in the future

I'm wondering what would happen if the son died before the OP.
It's minefield isn't it.

It's different because presumably grumppa the OP has already paid tax on her/DH's income all their working lives, whereas these companies are trading and making profits and avoiding taxation. As I said earlier, my DM was a teacher and paid tax throughout her career, gifted us a property on her retirement, died shortly after, and we had to pay tax all over again.

If the sole purpose of the OP's enquiry is to avoid the payment of tax, how is this different, except in scale, from those nasty companies which avoid, not evade, corporation tax?

Just wondering how this might affect your son's capital gains if he already has or might get somewhere of his own so he owned two homes on paper at least. Also assuming you die before him which is how it should be but isn't always. Definitely agree, take professional advice.

We've a similar problem in our family. My daughters are estranged from us, having been poisoned against us by my ex; I remarried and had a son who still lives with us. My MIL (84) has always made it clear that she doesn't want my daughters to get any part of her inheritance, but DH is her only child and she's left everything to him. As it happens, he's not in very good health and may well go before her but I'll probably eventually inherit her estate. The way we've done it is that I've set up a trust whereby my DDs are bypassed and part of my mother's estate has been left in trust for any grandchildren. If my daughters don't get in touch with the trustees within a reasonable period after my death, my son gets everything. My MIL has her own small house, but overall we arent't talking a vast amount of money, but she's pretty careful with her money and possessions and I suspect we'll probably inherit about 100 grand, which will set up my son's future comfortably. Good luck!

When my father died, he left his half of his house to me and 2 sisters. Mum owns the other half. There was stipulation in his will that mother would live in the house until she died. (We were not thinking of chucking her out on the street, but for anyone who is not entirely sure of their relatives, this is easily put in the will).

Is your son living with you? If so the tenants in common idea mentioned above might be a good idea but if he were to meet and get married to someone you don't get on with, your life could be hell. Unless you have health problems, 69 is still young, you could be around for another 20 years, you might even get married again!

Sorry just noticed last post was directed to Nonnie and not OP.

OP is widowed and has been for 10 years.