deed of gift

[anne_thompson]

My mother drew up a deed of gift in 1998 and her property is now owned by me. She has recently gone into a care home and at present the local authority know I own the house but haven't asked for any details. She has been assessed as to her weekly contribution to her care. Do you think the question of the ownership of the property will arise in future? In 1998 there was no thought of her having to have long term care as she's always enjoyed excellent health until recently when she was diagnosed with Alzeimers.

[Fibonacci]

some advice here
http://www.taxationwe...d-of-gift-t26324.html

[buildersmate]

Did she continue to live in the property from 1998 to 2011 and if so were you also living there as your sole residence?

[anne_thompson]

My mother bought the property approx 1987 and continuously lived there until the end of last month. I own and live in another property

[buildersmate]

Giving away one's assets in this manner is known as 'deprivation of capital' and the local authority may decide to treat it as if the asset hasn't been given away at all. The thing in her favour is the length of time ago this happened.
There is a fact sheet here about it.
http://www.firststopc...ds/resources/2338.pdf
Giving the asset to you but still living in it won't work with HMRC for IHT purposes - it is known as a 'gift with reservation' and will very likely result in the asset being treated as if it had never been given away for IHT purposes, when the time eventually comes.

[Buenchico]

Unless your mother was paying you rent (at the market rate) the transfer of property was a 'gift with reservation'. That means that, upon her death, the value of the house will still be counted as part of her estate for possible Inheritance Tax purposes. It's also likely that the local authority will take a similar view when it comes to funding your mother's care home fees. See 'Trying to avoid care home fee payments' here:
http://www.direct.gov...CareHomes/DG_10031523

Chris

[Ann]

I thought the "7 year rule" came into effect here ........as its longer than 7 years ago I assume its ok - at least that is what happened to a friend of mine.

[LoftyLottie]

I was told the 7 year rule still applied.

[Skyline D]

The 7 year rule applies to gifts actually given away. A gift with reservation is treated as if it hasn't been given away at all and the 7 year rule has therefore no relevance.