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Parents want to pass house to one child only

Parents want to pass house to one child only

Postby Zapster » Mon Feb 06, 2017 3:54 pm

Hello, please help with my questions

1. Parents want to leave their property to child A (who is presently living in his own home nearby).

Child B currently is living and caring for his parents in their home.
Parents do not want to leave their property to child B (because of previous family dispute involving a lot of money) but do not want child B to be homeless when they pass.

So parents were thinking of either:

(i) Giving all the property to child A , but in the WILL include a clause to say that part of the house must be given to child B in which to live.

(ii) Give one floor of the house to child A and the other tochild B but include a clause that says child B cannot sell his floor of the house.


2. Child A has children and should he die before child B is it possible for Child A to pass on the entire property to the children but include a clause to say that their uncle must not be removed from his floor of the house?

3. Must parents explain in the WILL the reason they do not want to give property tochild B? This may be important because child B has been involved with significant building and construction in the house and is now looking after them.


3. To arrange a will and to reduce the tax implications on the children are the parents meant to contact a solicitor or an accountant?

Thank you
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Re: Parents want to pass house to one child only

Postby atticus » Mon Feb 06, 2017 4:01 pm

These parents should consult a solicitor.

The circumstances you describe invite a dispute over the will after the parents' deaths.
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Re: Parents want to pass house to one child only

Postby Zapster » Mon Feb 06, 2017 4:09 pm

Thanks.

What about making a GIFT of the house in a WILL ..... Is that a job for a solicitor or will a solicitor refer the case to an accountant?

Or must a separate accountant be found?


I need to clarify the term GIFT? Its my understanding the GIFT is just a name given to the process of reducing the tax burden on the kids i.e. less and less WILL tax is paid on the property and the years pass by. And at 7 years there is ZERO tax.

Just need to make certain for the parents who were concerned that GIFT means the house is given to the kids immediately and they can throw the parents out of the house. The house is still the parents house .... right? They can't be thrown out?
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Re: Parents want to pass house to one child only

Postby atticus » Mon Feb 06, 2017 4:23 pm

I do understand what a gift is. I understand that a gift may be made in a Will: that is what Wills do.

Consult a solicitor. This is not a matter for an accountant.
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Re: Parents want to pass house to one child only

Postby atticus » Mon Feb 06, 2017 4:38 pm

Just to be clear, the OP's idea of a gift that is not a gift but really a tax dodge will not work and will certainly not save any tax.
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Re: Parents want to pass house to one child only

Postby Hairyloon » Mon Feb 06, 2017 4:56 pm

Zapster wrote:Just need to make certain for the parents who were concerned that GIFT means the house is given to the kids immediately and they can throw the parents out of the house. The house is still the parents house .... right? They can't be thrown out?

Er, no. If you give a gift to somebody, then the gift belongs to the person it is given to.
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Re: Parents want to pass house to one child only

Postby Zapster » Mon Feb 06, 2017 9:51 pm

atticus wrote:Just to be clear, the OP's idea of a gift that is not a gift but really a tax dodge will not work and will certainly not save any tax.


Nothing to do with dodging tax. I read somewhere a while ago that if a GIFT is made of a property then the inheritance tax reduces year by year for 7 years. The tax bill is ZERO if the person still lives after 7 years
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Re: Parents want to pass house to one child only

Postby atticus » Mon Feb 06, 2017 9:53 pm

But the gift needs to be a gift. Whatever your idea of a GIFT is, it isn't a gift. See what hairy said. If the thing is not given, but is kept, it is not a gift.

You did ask whether you should consult a solicitor. That would be a top idea.
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Re: Parents want to pass house to one child only

Postby Zapster » Mon Feb 06, 2017 9:54 pm

Hairyloon wrote:
Zapster wrote:Just need to make certain for the parents who were concerned that GIFT means the house is given to the kids immediately and they can throw the parents out of the house. The house is still the parents house .... right? They can't be thrown out?

Er, no. If you give a gift to somebody, then the gift belongs to the person it is given to.


Oh, so the person who receives the property assumes ownership immediately ???

But they only pay inheritance tax if the person lives less than 7 years ???
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Re: Parents want to pass house to one child only

Postby atticus » Mon Feb 06, 2017 9:55 pm

Yes. That is how gifts (and GIFTS) work.

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