If you wish to gift or transfer your property, it is a complicated matter and we can assist from start to finish.
Contact our Corby office on 01536 276300 or our Kettering office on 01536 311690 to discuss buying or selling a property.
Gifts And Transfers Of Property
Gifts and transfers of property can be done at any time. Accordingly, it is your property that you have purchased and you have the legal right to do as you please. You could gift the property to your children in respect of caring for you or transfer your property into another name. There are benefits of doing this and also in consideration of the prospect of having to pay care fees in the future. We would urge you contact us and ask to speak to Mr Adrian Chambers for more information in this regard as it is beyond the scope of straight forward Conveyancing transfers.
It is perfectly in order to give gifts and transfers of property to someone else at a price lower than the normal value. Gifts and transfers of property are often referred to as “Voluntary Dispositions”. However there are some implications and risks that are of relevance regarding gifts and transfers of property. These include:
3. Inheritance Tax
4. Residential Care
These are set out in more detail below.
What Happens If I Go Bankrupt?
If an individual makes a gifts and transfers of property and later becomes bankrupt, then in certain circumstances within five years from making the gifts and transfers of property, the bankruptcy courts can set aside the voluntary disposition and claim the property back as it was when owned by you originally.
What Happens If A Company Becomes Insolvent?
If a company makes gifts and transfers of property and within two years becomes insolvent, then the company’s liquidator can apply to the courts to set aside the transaction and again claim monies from the property.
Can I Avoid Paying Inheritance Tax?
Gifts and transfers of property made during a person’s lifetime can be used to avoid Inheritance Tax and can be made up to the current nil rate threshold. If the donor dies within seven years of the gifts and transfers of property, it attracts Inheritance Tax. The tax payable must either be paid in full or in part, depending on the number of years that have passed since the gifts and transfers of property was made. If the donor survives for longer than seven years, the gift is Inheritance Tax free.
Can I Avoid Paying Residential Care Fees?
If an individual makes a gifts and transfers of property with a view to depriving themselves of a resource for the purposes of securing or increasing entitlement to Income Support or, reducing the amount that they may be liable to pay to the local authority for accommodation, then they may still be treated as if the asset was still owned by them.
So, if an elderly relative transfers their house to say, their children for free or at a price lower than the actual value, just before they were about to go into local authority accommodation, the chances are that it would be treated as deliberate depravation. The local authority could then apply to set the transaction aside.
It is for the Local Authority to prove there was a deliberate intention in making the gifts and transfers of property. That can be inferred from the surrounding circumstances of the gifts and transfers of property. If the individual had made the gifts and transfers of property at a time when they were fit and healthy and could not have foreseen the need to move into residential accommodation, then the Local Authority may have difficulties in proving a deliberate intention. We specialise in Trust Deeds to assist in protecting your assets for the future as well as Estate Planning. In this regard please contact Mr Adrian Chambers to discuss further.
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I’m Gemma McKimmie, head of the Conveyancing department at Seatons in Corby. We aim to provide our clients with an outstanding legal service.
We will help and support you and most importantly we work hard for you.
Please contact us for a free, no obligation chat at our Corby office on 01536 276300 or use our online enquiry form to discuss buying or selling a property.