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ravedave

Signing Over House From Elderly Relation

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Hi,

My aunt has decided to leave me her house in her will. Her solicitor has told her to sign it over to me now and then rent it back from me in order to avoid losing it if she was to go into a nursing home in old age.

Will this leave me exposed to paying tax on the rent she would pay and would the rent be a nominal amount or must it be market value? I believe I've read somewhere that the rent must be market value.

Is there any other way this property could be signed over to me without incurring any income taxes?

Thanks.

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Hi,

My aunt has decided to leave me her house in her will. Her solicitor has told her to sign it over to me now and then rent it back from me in order to avoid losing it if she was to go into a nursing home in old age.

Will this leave me exposed to paying tax on the rent she would pay and would the rent be a nominal amount or must it be market value? I believe I've read somewhere that the rent must be market value.

Is there any other way this property could be signed over to me without incurring any income taxes?

Thanks.

Isn't it enough that you're inheriting a home...just pay the taxes that you owe, I thought this was a site about the social and economic costs of HPI, not a forum for tax evasion.

Edited by Lucifer

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Hi,

My aunt has decided to leave me her house in her will. Her solicitor has told her to sign it over to me now and then rent it back from me in order to avoid losing it if she was to go into a nursing home in old age.

This is the worst of both worlds.

It is ineffective for both IHT and for avoiding the LA "claiming" the house in event of the previous owner going into care AND will leave you with a tax bill on the increase in value.

You need to emply a solicitor who knows what he is doing, because your current one doesn't.

tim

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The LA can go back donkeys years (I've heard 20 mentioned, though I can't quote you a source) if it suspects deliberate deprivation of capital.

My tax is a bit hazy but yes, you would certainly have to pay tax on the rent, and to stand any chance at all of getting it out of IHT it would have to be full maket rent - possibly not even then; "reservation of title" or "reservation of interest" are phrases that spring to mind. An accountant might be a better source of advice here.

Edited by cartimandua51

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  • 153 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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