Transferring house ownership - legal and tax advice please!

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nvmof3
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Transferring house ownership - legal and tax advice please!

Postby nvmof3 » Mon Feb 04, 2019 6:29 am

My parents generously bought a house for a couple who helped them in their house and garden and cared for my father when he was terminally ill. They bought it on the understanding that when the couple died, they would leave it to my siblings and me to sell. Since then the relationship between my mother and them has soured somewhat although I still keep in touch with them.
I wanted to formalise the arrangement legally and as I see it, we have two options.
1) transfer the property into our names and grant them the right to live there rent free until the last one of them dies
2) come up with some sort of legally binding will that they cannot change without our consent.
In Option 1 my siblings and I become second home owners which I think has tax implications were we to sell and buy our main home. Also, are they allowed to just gift us a house or does that trigger a tax?
In Option 2, if such a will exists, what are the inheritance tax issues?
I’d be grateful for opinions or suggestions of people to talk to to figure this out.
Thank you!
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chorister
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Re: Transferring house ownership - legal and tax advice please!

Postby chorister » Mon Feb 04, 2019 7:07 pm

What an awful situation.  I'm not a lawyer but it seems to me that the first really important thing is who owns the house ie who is shown on the Land Registry?  If they are, then I think you probably have a real problem.  And secondly is there any documentation about the agreement?

I think the tax is probably the least of your problems, though you don't say how long ago the arrangement was made.

If you want a sensible, sympathetic lawyer who thinks litigation is the last not the first resort than I recommend Alexandra Adam at Gregsons in Wimbledon, but I would ask for an estimate of the likely costs first.  Hope that helps.
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nvmof3
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Re: Transferring house ownership - legal and tax advice please!

Postby nvmof3 » Mon Feb 04, 2019 7:39 pm

Thanks Chorister,
Unfortunately the house is registered in their names at the Land Registry. It was their council house and they had the opportunity to buy it at a discount to market price and my parents gave them the money to do that on the proviso that the house would be left to my siblings and I. There is no legal agreement as they couldn’t transfer it to us or agree to transfer it to us until a certain time period had elapsed, because of the discount.
They have no children but they have nephews and nieces and godchildren who they are very close to.
I would like to think that my relationship with them is strong enough to be able to sort this out amicably but I am nervous about what will happen when they die as I don’t know if their families know about the arrangements they entered into. That’s why I am keen to have it formalised sooner rather than later as they are now in their sixties and not the most healthy of people.
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chorister
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Re: Transferring house ownership - legal and tax advice please!

Postby chorister » Mon Feb 04, 2019 10:45 pm

I'm not, repeat not, a lawyer, but to be honest I think you may have a real problem getting ownership and that you really do need legal advice.  If your parents were prohibited from owning the house when it was bought then I think you will have trouble arguing that your mother can claim any title (but remember, I'm NOT a lawyer).  You may though be able to argue that a loan was made to them, and have a chance getting the loan repaid, especially when / if they sell the house or die.

Good luck.  And comfort yourself that your parents did something very good and decent for another family, even if it doesn't work out as you expected.
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Lola123
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Re: Transferring house ownership - legal and tax advice please!

Postby Lola123 » Mon Feb 11, 2019 6:00 am

I would seek legal advice ASAP and set up a mediation with the couple in the hope that
they would understand your position as if the house is registered in their name and there is no documentation setting out the terms of the transfer and your mother doesn’t have a charge on the property I’m not sure how they could be made to transfer anything to you unless they agreed on terms - hence mediation which would give you all an opportunity to explore options, it maybe that they only want the security when they are alive and will agree to terms. Speak to a good property solicitor who understands and supports you in mediation - I don’t think I can recommend on this site.
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davidgordon
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Re: Transferring house ownership - legal and tax advice please!

Postby davidgordon » Mon Feb 11, 2019 9:55 am

HI Nvmof3

I live local and run a legal practice we may be able to help. happy to have a conversation. I think the key thing will be to establish (and see what evidence there is to support) the facts around how your parents assisted on the purchase of the flat. That then will form the basis of any legal interest in it. I think you are exposed until you get this resolved. By all means call me on 0207 113 4003 or david.Gordon@dg-law.co.uk .
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