Giving away assets during a lifetime- what you need to know
Have you ever considered giving away your assets during your lifetime? Maybe you want to reduce your assets so you don’t have to pay as much in care fees, or are your beneficiaries going to be faced with a hefty tax bill which you want to avoid? Whilst it may seem like a good idea, it’s not all that straight forward.
Giving away your assets to reduce a tax bill won’t work as well as you would think. Whilst you can give away as many assets as you wish, if you die within 7 years of making these gifts you will be deemed as still owning the asset when any tax bills are calculated.
If you give away your property, what if the recipient of the gift became bankrupt or got divorced? While you may still live in the property, you will no longer own it and the property or asset will be theirs.
If you are considering giving your property away to your children because you know you need care which you need to pay for, giving your assets away can be deemed as deliberate deprivation. If you give away an asset and need care after making the gift, you could be deemed as deliberately depriving yourself of this asset for the purpose of avoiding care fees and you would be charged as if you still own this asset. Whether it’s a few months or, perhaps, even years later, the legal authorities will carry out investigations to establish whether you have deliberately given the asset away and it is up to them to determine this, but why else would you just give away your assets?
There are many ways in which you can protect your assets from things like care fees and Tax bills.
For more information make an appointment today with our Wills, Probate & Trusts team. They will discuss your personal circumstances with you in regards to protecting your assets and how to manage them correctly and efficiently.
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