that if you transferred your house to your children they will probably be liable to Capital Gains Tax when it is sold?

If you own your house and occupy it as your principal private residence. When you transfer it or sell it, it is exempt from Capital Gains Tax.  But if you transfer it to a child who doesn’t live in it, when it is sold, that child will be liable to Capital Gains Tax (usually at 28%) on the increase in value while they owned it but did not live in it.  Many people are caught out this way. 

 

To avoid this, you should transfer the house to a Family Protection Trust.  In effect you keep control, you can change your mind and most importantly you retain the exemption from Capital Gains Tax.

 

If you have already transferred your property to a child, the clever thing to do is this.  You set up a Family Protection Trust and the child transfers the house to your Trust. That avoids starting a new test for the Care Cost Rules but the Capital Gains Tax Exemption is reinstated. 

 

Just contact us on 0800 852 1999 or email contactus@mcclure-solicitors.co.uk to arrange a chat with one of our Estate Planning Consultants. 

 

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