Conveyancy process for gifting rental property to children?

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chatan

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My elderly parents have been advised by their solicitor to transfer ownership of their small rental property portfolio to their children. (It seems the properties are not going to have any appreciable CGT). The plan is to gift 1 property per child and have the children re-distribute the proceeds amongst each other following the eventual re-sale of these. My question is whether the conveyancy process here is as detailed as in the normal 'sale' of a house? Asking this another way, should I expect to pay pretty much the same (in legal and state fees) as a 'sale' transaction?
 
On a voluntary transfer:
A. The legal work is less demanding for solicitor acting for those acquiring (provided scope of work is explicitly limited). Can usually be charged at less than a purchase- maybe €1k+VAT+outlay.
B. The legal work is less paper, but more risk, for the solicitor acting for those gifting the property. Usually charged at somewhat less than fee for a sale, but this is changing due to enhanced risk. Some solicitors might charge as little as €500+VAT. I think they are assuming risk for very little reward and generally don't take on this work except for long standing clients.
 
Gordon Gekko said:
Never ask your barber whether you need a haircut…
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There may be particular reasons why this solicitor apparently gave this advice, but for others reading this, I should say that what is proposed by parents of OP would rarely make sense. Most solicitors would advise against this for most clients.
 
Perhaps the parents are paying tax at 40% plus the trimmings, whereas the kids are less flush? Otherwise, yeah, hard to see the rationale.
 
Thanks for the many helpful replies. Regarding the rationale one reason has been to end the 'low rent, low value, high hassle' associated with these properties. Uncertainty about future inheritance tax thresholds was also a factor. I'd be happy to hear of the reasons @MOB against such a proposal. (I don't mean that in a sarcastic way, of course).
 
chatan said:
Thanks for the many helpful replies. Regarding the rationale one reason has been to end the 'low rent, low value, high hassle' associated with these properties.
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How does transferring them to the children change that?
chatan said:
Uncertainty about future inheritance tax thresholds was also a factor.
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What exactly do you mean?
It's foolhardy to plan based on suspicions about what might happen at some point in the future.
chatan said:
I'd be happy to hear of the reasons @MOB against such a proposal. (I don't mean that in a sarcastic way, of course).
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Might also be an idea to outline the supposed reasons FOR the proposal because no compelling one has been presented so far and most people here reckon it's probably a bad idea given the limited info posted to date.
 
ClubMan said:
How does transferring them to the children change that?

What exactly do you mean?
It's foolhardy to plan based on suspicions about what might happen at some point in the future.

Might also be an idea to outline the supposed reasons FOR the proposal because no compelling one has been presented so far and most people here reckon it's probably a bad idea given the limited info posted to date.
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All that's the OP's parents' business surely?

The OP didn't ask for advice or a second opinion on the substantive issue.
 
Thanks @ClubMan .
Yes, the 'hassle' is passed onto the children. But they are better able to handle that and deal with the re-sale. My reference to inheritance was the possibility that the legislation here (specifically inheritance tax thresholds) could change in a detrimental way. I think that must be clear even if it is obviously speculative? That is all I can really offer on the rationale. If there are general reasons to the shortcomings of transfer vs inheritance I'd be happy to hear.
 
Advantages include avoiding fair deal taking properties into account, assuming the appropriate ? 4 year period elapses.
Avoiding delays with probate if either parent were to pass away.
Less hassle and worry for elderly parents who may no longer want to be landlords.
I see no disadvantages.
 
Mamamia22 said:
Advantages include avoiding fair deal taking properties into account, assuming the appropriate ?
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The Fair Deal benefits of lifetime transfer are somewhat overrated. Another poster explained it pretty well on this thread here.

My elderly parents have been advised by their solicitor to transfer ownership of their small rental property portfolio to their children.
I agree with posters above that the solicitor has a material interest in a transfer here and advice should be treated with caution.
chatan said:
(It seems the properties are not going to have any appreciable CGT).
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I don't see this as all that relevant. The parents could live another 20 years in which time house prices could double. A CGT liability of course disappears with the death of the owner. If you make the transfer today the clock starts again and the child may have a CGT bill in 20 years.

There are all sorts of non-financial reasons for making or not making the transfer. But do try do with with full knowledge of the tax and other implications.
 
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