Deed of Gift

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KimboW | 15:59 Thu 23rd Mar 2006 | Business & Finance
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My parents want to give me their home, but remain living there until they die. Is it true that I simply have to complete the Land Registry form TR1 ? What other implications are there for tax etc ? Thank you,


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If they die within 7 years you will be liable to inheritance tax (if the estate breaches the threshold of course) (taper reduced over that 7 years) Also if it should become necessary for them to have local authority care the authority may claim the house was given away as a payment avoidance measure and they would have to pay for that care.

For inheritance tax, if they remain living there and do not pay you a market rent it is regarded as a "gift with reservation" and does not get excluded from their estates even if they survive 7 years. The full value at the date of death will be part of the estate for calculating IHT liability.

There may be Stamp Duty Land Tax implications of the transfer to you - in other words this tax may have to be paid on the market value of the house at the date it is transferred. It would be best for you to get solicitors advice before going ahead.

So far as you are concerned, if you don't live in the house and eventually sell it you would be liable for Capital Gains Tax.

You can DIY quite easily, but the Land Registry Forms required are TR1 and AP1. They must be submitted to your local District Land Registry Office to whom you should speak first as they will guide you through the process and advise you of their fees (2 x �30 from memory). The 1st and 3rd paragraphs of the themas answer are correct, but regarding the 2nd you do not need a solicitor. Simply telephone 0845 6030135 and give the Stamp Duty Land Tax Office your details and property value. The SDLT will sort it out for you and at conclusion provide you with a Certificate enabling the Land Registry to proceed (the Land Registry cannot do anything at all without the SDLT Certificate).
Never do DIY conveyance - even if you think you are capable, don't. I have quite a few years of legal academic study, but don't have the benefit of indemnity insurance if a mistake is made. Get a solicitor to do everything - then, if anything goes wrong, you are able to claim off their insurance.
That is completely wrong. Certain matters (of which this is one) have been simplified at the Land Registry for the express purpose of people doing it themselves - the Land Registry have long recognised that there is absolutely no point in paying a solicitor hundreds of pounds to fill in a simple form no differently from the way which you can do yourself. A Land Registrar is a Senior (Specialist) Solicitor and readily spots if a mistake has been made and assists people to correct at no cost other than the original fee. It is so simple now that you can look up the address of your District Land Registry Office on the web, print off the forms, calculate the fee from the LR on-line calculator, phone the Stamp Duty Land Tax Office, sort out any liability, obtain the SDLT certificate, pin it all together and send with a cheque to your local Land Registry Office and thats it.

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