how do i transfer ownership of my flat to my adult children while i still live there?

Question

i want to be able to live in flat but transfer ownership to my adult children. i am happy to continue paying the remainder of mortgage.but need to know they will own the property

Answer 1

Be very careful here for if one of your children marries and then separates then the other partner can claim part of your flat. Moreover, if you are selling in order to perhaps get benefits of some kind then the DSS will not recognise the sale as legitimate whilst you continue to live in the flat and continue to pay the mortgate

Answer 2

You probably can't transfer it to them whilst it's still mortgaged as most mortgage contracts have a "Due on Sale" clause that will require repayment in full upon transfer.

There are a number of ways that you can do this, but I would recommend you consult with an estate planner first.

One option (once the mortgage is repaid in full) would be to transfer it to them and take back a Life Estate. This would give you a right of occupancy for the rest of your life.

Another option might be to place the flat in a trust with your children as beneficiaries. This may be workable while you still have a mortgage without triggering any Due on Sale clause. This would also offer the added benefit of bypassing probate when you pass on.

Lastly, if your estate's total value is below any Estate Tax exclusion amount (and you don't have any significant debts other than the mortgage) you could simply leave it to them in your will. A transfer due to death generally won't trigger a Due on Sale clause in the mortgage though even if your mortgage contract does provide for that, most mortgagors won't enforce that as long as the repayments are being made in a timely fashion.

Do consult with an estate planner or a solicitor who specialises in estate planning first. That way you should avoid any errors that could affect your legal rights and minimise your (and your children's) costs in the long run.

Answer 3

I don't recommend this. I've heard really nasty stories about parents who gave their kids their property and the kids turned around and kicked them out. There wasn't anything that they could do about it because they'd given ownership of the property to the child.
Talk to an estate lawyer and find a way to put the property in trust to your children. Or make them the owners when you die. If you leave your children your property PLEASE stipulate how it will be divided among them. You have NO idea how many families have been torn apart because of fighting over an inheritance. I cannot stress too strongly how much bitterness is caused when children get into fights over things that their parent left in a will because the parent did not stipulate who got what.
If you have personal things or mementos that one or more children want then put who gets it in your will. If you want to give a child something personal of yours then you might want to give it to him/her before you die.
DO NOT give your children ownership of your flat. I cannot stress too strongly that, while your children may all be saints, there are plenty of horror stories about parents who did this and then wound up on the streets because their kid turned out to be less saintly then the parent thought.

Answer 4

Hi!

You need to speak to someone who knows something about tax, because there are HUGE implications here for Capital Transfer Tax amongst other things.

Actually doing the transfer is relatively simple, you need to tell the bank or building society of your intentions, they sort out the necessary deeds and paperwork for you all to sign, and VOILA! the house is your childrens'.

Don't forget, there will also be legal fees to pay.

Answer 5

The mortage company will not allow this as your mortage is secured on the property and if you transfer it, their security is gone.
There would be CGT implications for your children when they come to sell as well as IHT issues if you don't live for 7 years. You need legal advice.

Answer 6

What's the point? If you are hoping it will save inheritance tax, think again. It won't. It's called a gift with reservation of benefit, and is completely ineffective.

There is no CGT to pay on the gift, but your children will have both IHT and CGT to pay after your day, which is probably not what you want.

Answer 7

My parents did this.they consulted a solicitor,the house was transferred over to me.I have since sold the property with no problems.

Answer 8

quitclaim deed and a life estate for you.