I would appreciate some advise please, I am currently around 11 months into my IVA and now my parents have said they are thinking of signing their house over to me, I dont live at home. I was wondering if this could affect my Iva.
It may very well have implications, especially if something were to happen to them whilst you were in your IVA - hopefully it won't.
Can you persuade them not to do it at the moment?
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
I would try to hold them off until after the IVA. If they want to put it into your name to avoid inheritance tax you are best off speaking to a solicitor regarding any other avenues you could try especially if your parents are in the dark over your IVA. Gifting the house over to you will be an asset which your creditors could get their teeth into.
One thing I would ask one of the professionals to answer on here however is what's the difference between someone saying I am gifting you a £1000 for your birthday but I would not give you this money if it had to go to the creditors therefore it doesn't have to go into the IVA according to previous posts on here. If the parents stipulated on the gift transferral that they wish to gift the house over but on the proviso that none of the money is paid over to creditors is this something that could be written in? Otherwise it appears one rule for money gifting and one for houses.
Daveyboi, although not a professioanl, I would think there is a limitation as to the size of a gift (as per HMRC's guidelines on tax and gifts). I don't know the current figures, but, a while back, parents could gift £3k per annum to children, which would be tax free from the recipient's point of view.
That apart, any distribution of a potential Estate in old age has to be taken very carefully as there is always the possibilty of such transfers being reversed.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
That is a slightly different issue Foggy. Gift tax only comes into force if the person making the gift dies within 7 years of gifting the money to you. I presume if a family members pays a Full&Final for you as a "gift" and then die within 7 years they could dispute that you owe Gift tax on this "gift" putting you into debt again unless there is a clause preventing this from occurring. Again a professional needed for that one to confirm.
Under what situation would those transactions be reversed? Are you saying a claim from another family member disgruntled they have lost a house in the inheritance due to it being transferred over or if the person signing over the house goes bankrupt situations like that you mean? Quite an interesting topic to be fair and I hope one of the IP's pick up on this and provide an answer as I for one would find it an interesting read.
I realise that this is a different issue, Daveyboi. I was just using the illustration to make the point that "size does matter". However, the question you raise regarding the F&F "gift" is an interesting one.
As for reversal of transactions. If the donor dies shortly after making a transfer (again that magic 7 years raises it's head) HMRC could deem that the transaction was made to avoid inheritance tax and apply to the courts to have it reveresed. Similarly, if the donors go into care, the local authority might deem the house needs to be sold to cover care costs and can take the same action if they suspect the transfer was to avoid such liabilities.
As you rightly say, the OP in bankruptcy could also take the same view and actions. Relatives appearing from the woodwork to contest the will is an ever present possibilty, but is a more personal issue.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
The OR will reverse any undervalue transactions in bankruptcy regardless of whether it is a house transfer, a car sale - anything where there is a loss of money.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Social services if suspected that a house has been given away to avoid care fees (easy to find an land register) will still take the houses value into consideration when means testing care allowances, It effect will block any contribution from social services.
my parents have now said they plan to put my sister and brother's name on the deeds too. My family dont know anything about my IVA, I can never ever tell them. Im wondering should I allow my IVA to fail?
I have 5 years left on my IVA so I cant wait until then for them to transfer it over.
I have read that in year 4 i would be forced to remortage my share and would have to get permission from my brother and sister in order to do this?
Last edited by cherry545 on Sun Jan 15, 2012 12:17 pm, edited 1 time in total.
You need to check with them why they wish to sign it over to you. I am assuming its to avoid inheritance tax personally it's the usual reason. If you can't tell them about the IVA I would politely refuse personally on moral grounds because if you did get signed onto it whilst in an IVA they could try to get you to remortgage in year four whilst your parents are still alive which would be awful or worse if you ever got made bankrupt they could force the sale of the property for your equity release for your debt. I would definitely refuse until you are in a much better financial situation for your families sake myself. It's up to you of course how you decide to play this but asking your IP what all the possible outcomes would be would put you in posession of all the facts and help you make an informed decision as to what you should do.
