Deed Of Gift - Solicitors Costs

[Dollie]

Does anyone know how much it costs to draw up a Deed Of Gift at the solicitors - roughly? Mum and dad want to pass over their house to me and my sister - they are still in excellent health but want to be prepared as they are getting older. Thank you.

[WendyS]

I hope they will consult a solicitor about this first because if they continue to live in the property without paying a market rent to you and your sister, they could be deemed to have divested themselves of it deliberately if it ever came to an issue of one of them having to pay care home fees.

Quite honestly I think it's an absolute scandal that people who have worked hard all their lives and paid their taxes should be caught in this trap, but that is the case at the moment so do please encourage your parents to get some legal advice. They could, of course, pay you and your sister rent, and what you do with it is your own business if you want to keep it aside for their use during their lifetime, but get some legal advice first.

[Dollie]

Wendy - thanks ever so for your answer. We have looked into this side of things already but without taking legal advice yet. We know that there is a possiblility that mum and dad could be seen to be disposing of their assetts etc. and that is why we want to do it now whilst they are in good health. It gets more tricky when they are ill and could need nursing home care sooner rather than later. We will be going to a solicitor - I just wondered if any ABer had done this already and had an idea of cost. Thanks again Wendy. Dollie x

[jake-the-peg]

It's not just nursing homes the law has changed and this now applies to estate duty as well. If they continue to "derive benefit from" the asset that is continue to live in the house without paying a market rent then it will still count towards inheritance tax

[WendyS]

Dolle - I don't know whether you saw Sunday's Panorama programme about the scandal of the NHS unlawfully forcing people to sell their homes when in fact they should have been entitled to free health care because of their state of health but it certainly drove home the fact that you need to do your homework thoroughly on this issue.
How old are your parents? If they're in the 80's or 90's I think there might be a case of them to have been seen to be disposing of assets to avoid care home fees. If they're still in their 70's when longevity is now forecast to be much longer, I think it's more difficult for the case to be argued. But if your parents are seen to be paying a reasonable rent, then the situation changes. Also there is the complication of Capital Gains tax which you might have to pay further down the line, after they have died. If the house is under the Inheritance Tax limit when they die (if it's still in their ownership) the proceeds wouldn't be taxable. If it's your property when they die, you and your sister will have to pay Capital gains tax if it's sold. It's a difficult dilemma. The Chancellor of the Exchequor will probably get you in the end, no matter what decision you make. Makes you wonder why people work so hard to keep themselves independent when the State robs them at every point.

[Dollie]

Thank you all for good, clear answers. I know its something we will have to look at carefully and take legal advice about - it is worrying though. Mum and dad are in their early seventies and thats why it seemed appropriate now whilst they are both well. Wendy - I did see the panorama programme which was frightening - seems a shame though - mum and dad have saved all their life and worked hard, they would like my sister and I to have some inheritance. Thanks again. Dollie x

[jake-the-peg]

Remember Dollie you do get over a quarter of a million pounds (�285,000 at the moment ) before you have to pay a penny in inheritance duty.

[sandbach99]

Not quite the same but I bought my parents house for a �1 then charged them rent, never paid and in the deeds they paid a peppercorn rent and had a 99 year lease.
There was fees solicitors, land registry etc, my mother was already ill thats why it was done, but she never needed nursing home care. I think the solicitor said that after 7 years the social services could do nothing about the sale, and before that time it would be for social services to prove that the sale deprived them of capital rather than let my parents stay in their home whilst a landlord [me] picked up the repair bills etc that they couldn't afford therefore keeping their home safe and habitable
This was sometime ago and the law may have changed,