How can the fact you have been gifted a third of a house not be factored in as a windfall??? I would be very wary of that advice and if the IVA failed the OR would grab that house before you blinked. If you are in a precarious financial situation as you are it's quite simple really, don't put yourself into a situation where your personal circumstances could lose your parents their house, their security and their happiness. Ultimately it's a decision for you to make but if my parents didn't know about my IVA and asked to put my name on their house I would point blank refuse as I think I would be very selfish to agree to it and put them in jeopardy.
yes I thinking I could've just been told anything over the phone, it was a customer services caseworker. I had also emailed Karol but I got a reply saying that because I had already been speaking to someone from their customer services they wouldnt be replying, but yes its too important to be given what might have been an off the cuff response from customer services. I also met with a Solicitor he advised against my name going on the deeds because he believed the creditors could try to make me bankrupt in order to get my share, the solicitor also mentioned there was a such a thing as a secret trustee which means my share could be put in someone else name, and that it would be out of reach from the creditors.
I would be more inclined to trust a solicitor who has no financial gain out of the situation as opposed to GT who have given nothing in writing, refused to discuss it with you via email because someone "on the phone" had discussed it with you. It's all very dodgy to me and I would speak further to a solicitor about how to go about it legally without putting your parents at risk.
Please keep us updated and let us know if you you suddenly get any phone calls of interest from GT out of the blue wondering if the house had been signed over yet!!!
this is the response i got back from Grant Thornton which certainly differs as to what I was told over the phone originally:
"Thank you for your email.
I will try to address all ways in which this change will impact your IVA however should you not understand any points, I would be happy to arrange a time to discuss with you by telephone.
My understanding from the previous telephone call with Customer Services, is you were concerned about the need to change the terms of your arrangement should a third share of the property arise.
The change in ownership of the property would be considered an after acquired asset. Any asset acquired after the date of approval becomes subject to the terms and conditions of an IVA. We would require confirmation of the change, if and when it happens as we would be required to inform creditors of the asset. This doesn't necessarily require a change to your IVA at this stage.
In the final year of the arrangement depending on certain factors, such property value, deduction of any secured borrowings and what your third share equates to it is possible a remortgage attempt would be required. However given your circumstances, it is an option to formally vary your case to offer creditors an alternative, such as a lump sum from a third party with an equivalent sum or additional monthly contributions.
Certainly should the property be sold your share of the equity would be due to the arrangement.
I think there has been some confusion because the property will be changed ownership by your parents, and not being treated at this stage as inheritance which falls under the windfall clause.
I hope this better explains how this will impact or be impacted by your IVA, however if you have any further queries please do not hesitate to contact Customer Services, or advise a suitable time Mon-Fri 8.45 a.m to 5.00 p.m and I will call you to discuss.
Kind Regards"
I wonder if anyone on the site has experience of this happening to them, and how they dealt with it...
Last edited by cherry545 on Thu Jan 19, 2012 3:27 pm, edited 1 time in total.
From reading their response it's a round the houses way of saying that the creditors will be told of the change in your circumstances and additional monies will be owed at the end of the term if there is equity in the property. Now if your mum and dad are close to retirement I am assuming they are close to or have paid up their mortgage. This means the house is practically all equity and you should not allow them to put the house in your name until your IVA is concluded under any shadow of doubt. It will put your parents home at risk and you would be very unwise to do it and a bit unkind from a personal opinion.
If your solicitor has a hidden legal way of including you without affecting current debts etc feel free to make enquiries down that route but ensure they cover all situations such as if you went bankrupt. Always think of worse case scenario in these situations when you are dealing with someone elses money.
if its to do with care home fees thay can claim back within 7years,could they put it in your childrens name ? if transfered ,speak to finical advisor and ask there advice.I think your allowed a gift of £5000 per year if they so wish to give it to you without having to declare to inland revenue If i were you if you have children would ask your parents to gift any money to them ,so that you dont have to give to the iva pot!.Depends on where you live i know a finacial advisor that you could call ,its in the north of england .good luck x
It's currently £3000 allowed to be gifted per person doing the gifting per tax year without being liable to gift tax. This would not help in this situation as both parents combined will have £6000 allowance per year to gift which between all three children is only £2000 each. That would take a long time to gift the value of the house plus the house is not cash it's an asset which fluctuates in value.
The tax free gift exempt would not be good in this example if it was cash as the money would be payable into the IVA if paid to the original poster. However, as a point of interest to other posters the gift tax rule again is covered by 7 year rule and the % of gift tax paid upon the death of the gifter of the money also diminishes over the 7 years.
So for example if you was gifted £100,000 today by a relative and its declared a gift. If it's the persons only gift that year then with the £3k of tax exempt allowance deducted a total of £97,000 of it will be liable for gift tax if the person giving the gift dies within 7 years. If the gift is a house and the person gifting still lives in it therefore retaining interest in the property it still is liable for inheritance tax anyway.
Here is a couple of excerpts from the HMRC website which is of interest especially as if what she is trying to do is avoidd care fees but still live in the property its likely to not achieve that anyway.
-----
The seven-year rule - 'potentially exempt transfers'
Any gifts you make to individuals will be exempt from Inheritance Tax as long as you live for seven years after making the gift. These sorts of gifts are known as 'Potentially Exempt Transfers' (PETs).
However if you give an asset away at any time, but keep an interest in it - for example you give your house away but continue to live in it rent-free - this gift will not be a potentially exempt transfer. Follow the link below to find out more.
If you die within seven years and the total value of gifts you made is less than the Inheritance Tax threshold, then the value of the gifts is added to your estate and any tax due is paid out of the estate.
However, if you die within seven years of making a gift and the gift is valued at more than the Inheritance Tax threshold, Inheritance Tax will need to be paid on its value, either by the person receiving the gift or by the representatives of the estate.
If you die between three and seven years after making a gift, and the total value of gifts that you made is over the threshold, any Inheritance Tax due on the gift is reduced on a sliding scale. This is known as 'Taper Relief'.
---
The other section about gifting your home is very complex and you are better reading up on it on the HMRC website or seeking legal advice. You have to be very careful when conducting these transactions in the coorrect fashion and a solicitor with the knowledge is usually the best way to go.
Why hide your iva? You have the courage to face up to debt but wish to hide it from those close to you? You are in a catch 22 situation or in a bit of a branson pickle.Worse case scenario,everyone is affected if you have the deed with your name on it. Family feud can be debilitating. Announce your iva to them as good news and you feel happier,but you wouldn't get the house........
Last edited by 785583 on Thu Jan 19, 2012 9:16 pm, edited 1 time in total.
My parents, work and friends know nothing of our IVA. Daughter and stepkids do, they are (or have been) in a similar situation and we did actually help stepdaughter sort out an IVA.
My parents would be mortified!
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
