Selling your house to your children for less than it’s worth isn't helpful for tax or care fee planning. 
Here are some of the reasons why. 
Deprivation of assets 
If you sell your house to your children and either you or your partner need to go into a care home, your local authority could argue that you have deliberately deprived yourself of assets
Under these circumstances, unless you qualify for NHS continuing health, your home would still be regarded as asset. Its full value would still be included in the assessment when your care fees need to be paid and you would be regarded as ‘self-funding’ until your assets were reduced to £23,250. 
There isn’t a time limit on this, so it wouldn't matter how long ago you sold your house to your children. 
Deferring your care costs 
You might not need to sell your home. In some circumstances your local authority can arrange a 'deferred payment agreement' when you own a property and go into care. Many offer interest free arrangements. 
You don’t need to make payments immediately, your care costs are paid for after your death, when your house is sold. 
Inheritance tax 
If you chose to sell you property to your children, the difference between the sale price and the market value would be a seen as a ‘gift with reservation of benefit’, because you would continue to live there. If you are still living in the property when you die, the remaining market value of the property will be treated as part of your estate and will be subject to inheritance tax
To be sure your future position is protected, it is important to have a ‘declaration of trust’. This is a contract between you and your children giving you the right to stay in your property and confirming who is responsible for expenses. 
Stamp Duty 
If your children own another residential property, they will have to pay 3% stamp duty on the purchase price of your house. If your children don’t own property, then Stamp Duty won’t be payable. However, if they buy property in the future, they will need to pay Stamp Duty on that property and an additional 3% of its entire value because they already own another property. 
Capital gains tax 
Your children will be considered as the owners your house from the date of the purchase. When they sell it, they can deduct the purchase price and the cost of improvements, but they will pay Capital Gains Tax of up to 28% on the balance. 
Risks you should consider 
If your children have a disagreement after buying your property, are bankrupt or get divorced, their share of your property might be included in their assets. If they die without a Will, then their share of the property will be passed on according to the laws of intestacy. In the worst case, your house might have to be sold. 
Equity release 
Equity release allows you to carry on living in your home and to release funds against its value without making monthly repayments. 
You can use these funds for home improvements, repaying debt, providing financial assistance to your family, buying yourself some treats or paying for care fees. 
The Safe Home Income Plan scheme (SHIP), now known as the Equity Release Council (ERC), ensures these arrangements are regulated to protect your interests. 
For an informal discussion about a Will to help protect your financial future, please contact me today
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