Should I gift my home?
Ask yourself this question very carefully. Should I gift my home? What may appear to be a good idea to-day, may just blow-up in your face.
For example consider these points:
Any change that transfers the ownership of your home to another while you need it, robs you of your personal security. It can result in disaster for you, because:
- Gifting the property, and continuing to use it, is not a “true gift” in law, unless: you pay a market rent or make arrangements to compensate the “new owner” for its use.
- From the date of the gift, it will –usually– not be the primary residence of the “new owner”, and will therefore be liable for Capital Gains Tax on any increase in value.
- If your child becomes involved in a divorce or bankruptcy, then your house will be one of his assets, and therefore it will be claimed as part of the divorce/bankruptcy settlement.
- If your child dies before you do; then your house will be part of his estate, and it will belong to his beneficiaries. And what then? Or worse.
- If your presently good relationship with your child breaks down, then your ability to remain in your house would be prejudiced. And what then?
Gifting your family home and hoping it will be alright, is a very risky business. It can be a potentially very expensive affair in more ways than one.
If you would like to know more about this area of the law and how it might affect you, then feel free to contact us on 0118 9 740 130 for a confidential discussion. Alternatively, complete the email enquiry box below and we will be in touch shortly.