We have seen and heard of parents who have transferred their home outright to their children by gifting the property to them or adding them to the deeds of the house.
However, we have seen numerous cases where the parents have come unstuck financially and have had to sell the property, move or have lost the property completely and have ended up homeless!
When you gift the property to your children or family, you have totally lost control and are at the beck and call of other people and there are also outside influences.
We have listed the dangers, why its so important not to do this:
- Should your children have a relationship breakdown or divorce, a Lawyer could be chasing for the property.
- If you wish to move, downsize, or sell then the property will be classed as an 'investment property' should they already own a property. If property prices have risen, then there may be a
considerable Capital Gains Tax liability which will have to be paid from the proceeds of the sale by the children.
- If your children have poor financial, management, become self employed and have debts, or even become bankrupt, then creditors will be looking to force sale the property or at least place a
restriction on the property.
- You may be 'cascading wealth' for your family and giving them an Inheritance Tax Problem
- Your children may decease you and have not even made a Will or have made a Will and you are not a beneficiary. In this case you would have to vacate the property.
- Illness: If the children become ill and need finance or already have re-mortgaged the property, then they may forfeit the repayments and cause reposession or sale of property.
- The Local Authority would probably look into this transaction as an act of 'Deliberate Deprivation' should you need care, as why else would you want to do this for.
We are not advocating that you shouldn't give your assets to your family, only that is should be done in a protective and controlled way. Contact us for further information.