Gifting marital home to children - how viable?

My husband and I (lol!) are agreable to gifting our marital home to our x 2 adult children prior to settling our divorce. This would help us achieve a mutual objective of ensuring that our children have some security/capital. I would then live with one of our daughters in this property and woudl pay her rent and contribute to running costs.The rent would be paid to the daughter who doesnt wish to live in the property.

I am also agreable to transferring our second property (which we currently rent to one of our children) into my husbands name and he would take on the remaining mortgage as he is still working , though I am retired.

If this is possible could the asset transfer be regarded as offset in lieu of him being awarded a % of my pension.

We currently have very similar earnings though in the past I earned triple what he earned. When he retires in 4 years time his income will be less than mine - but he will have capital assets and I wont have any.


Hope that makes sense.

There are tax implications so a chat with an accountant may be in order.
You know that inheritance tax is changing soon so the FMH I think up to 325k will be exempt in 2017...please check this.

I believe this is only on the FMH so if you dispose of it the rest of your assets may be taxed under normal rules.

You know of the inheritance tax rules of 7 years on gifting ?

Down side. If your daughter dies before you then its one way traffic. You dont get the house back.

If you move in with daughter you must pay a reasonable commercial rent. This is of course taxable under normal rules. Then if the money is given to the second daughter by the first it either comes under gift rules (max £3k a year) or it may be treated as taxable income.

From your point of view it might be better to set up a trust fund so talk to someone who specialises in this. I dont know much about this but a trust fund has trustees who can distribute funds with trustees permissions.

Better that you check with an accountant or financial guy as its all very complicated.
For example. I gifted my daughter 2 houses and a month later had a heart attack. That was a hell of an incentive to live as 40% of their value would have gone to HMRC !!

Polar