Gifting or Transfer Of Property
Transfer of Title
Are you looking to transfer the ownership of a property from one person to another? Although this is a fairly straightforward process, it’s important that it is completed correctly to ensure everything progresses smoothly and to avoid unexpected problems in the future.
Our expert property solicitors can help with every stage of a transfer of title, providing the support to complete your transfer efficiently and correctly. We will contact the Land Registry on your behalf and ensure that all the necessary documentation is completed properly. We will also explain any factors that may arise from the transfer – giving you the peace of mind that all the legal details have been covered correctly.
Are you thinking about gifting your home?
Your home is your most important and often most valuable asset. Before deciding to proceed you should take legal advice on all the implications, as it may not be possible to reverse should you later change your mind. Before making any decision to gift it, have you considered the following issues?
Maintaining your right of occupation so you do not risk being forced to leave your own home.
Whether any gift should be outright or to a trust.
What are the tax implications in respect of Capital Gains Tax, Inheritance Tax, Income Tax, Stamp Duty and Pre-owned Assets Tax for either the person giving away the house or the relative receiving the house?
What happens if the relative falls out with you or they are influenced by others? You may think it unlikely, but things can change.
What happens if the relative dies before you gets divorced or becomes bankrupt? There is a risk of a third party having a claim on your home.
The gift may affect the relative’s own entitlement to means tested benefits.
Any gift may not result in the house being outside of any means test for the payment of long term care fees as there are anti-avoidance provisions that may mean the authorities challenge the gift.
Assuming that you have considered all of the issues and you wish to proceed with a gift of your home then you can either make an outright gift or you can make the gift to a trust. A trust is a legal relationship, the details of which are set out in a trust deed. The trust assets (which will be your home) are held by trustees for the benefit of the beneficiaries specified in the trust deed.
You will be one of the beneficiaries, which means you will be able to guarantee your right of occupation for as long as you wish. The trustees will become the legal owners of the property and the title of the property will be transferred into their names.
Why consider gifting your home?
You may decide to make a gift of a family home to provide a benefit for a family member in return for a benefit to you. For example, it may be that a child has made a financial contribution such as improvements to your home, your child may be providing care to you, or your child may agree to take on the financial responsibility for your house (e.g. insurance, upkeep, repairs, maintenance) in order that you can remain in the property should you not otherwise be able to afford to do so. Your child may agree to take over the paperwork relating to property ownership because it is becoming too much for you to deal with. It might also be that you want to avoid any delays when you die and the trust will mean that the property could be sold before a grant of probate is obtained.
However, even if any of the above apply, it’s important to ensure your rights are protected.
If you make an outright gift then there is the risk that your children may view your home as a lump sum and be tempted, or be influenced by third parties, to try to realise the capital by whatever means. They could fall into financial difficulties of their own or become entitled to means tested benefits which would be affected by property ownership.
It is important to consider what would happen should they die before you, become divorced or bankrupt. The taxation position is important to consider as your children may have a capital gains tax liability on the sale of the property.
A trust protects against these and other issues.