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GIVING your home to your children to avoid inheritance tax or
care cost is not a good idea – writes John Davies, of Trinity Will
Writers Ltd.
Firstly, the local authority is empowered to disregard, without limit of
time, any transaction that it considers ‘self deprivation’ .
Secondly, any change that transfers this ownership of your home, robs
you of your security and can result in a disaster.
Giving your home to one or more of your children is often quoted as
an ideal solution, but gifting the property, while continuing to live in it,
is not a ‘true gift’ in the law unless you may pay the full market rent.
If your child does not live in the property, it will not be the primary
residence of the owner and will therefore qualify for capital gains tax
on any increase in value.
If your child gets involved in divorce or bankruptcy proceedings,
your house will be one of their assets, to be claimed in the legal
proceedings.
If your child dies before you, your house will be part of their estate and
go to their beneficiaries.
If your relationship with your child breaks down, your ability to remain
in your house would be prejudiced.
For those reasons, it is recommended that you seek proper legal
advice.
Trinity Will Writers Ltd can take away the headache of writing your will.
MAKING A
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