Adding your child’s name to the deeds of your house is a decision which should take some consideration. There are some recurring factors as to why people choose to add their child’s name to a property. 

These usually include setting up their child financially, protecting their assets from being hit with hefty tax bills or protecting their child’s inheritance from a new spouse or family arrangement. 

It’s important to understand how putting your child’s name on the deeds can lead to uncomfortable implications. With that said, adding your child to the deeds may be the ideal solution for your particular circumstance. 

You can put your child’s name on your property but that doesn’t mean you should. We’re here to make sure you have the best advice and end up with the right solution for you. 

We strongly advise seeking legal advice before you start changing names on the deeds to your property. Talk to one of our solicitors today to start your process on the best footing. 

From avoiding the sting inheritance tax to helping your child get on the property ladder, we understand your motivation for adding their name. 

In order to add your child’s name to the deeds, you’ll need to transfer a share of equity to them. This needs to be overseen by a solicitor like us at Bromfield Legal. 

How do I transfer my child’s name on to the deeds of my house 

There are a few steps you’ll have to take to complete this process which are listed below. 

1. Transferring equity by ‘gifting’ the property. 
2. Getting a solicitor to help with documentation and legal matters. 
3. Safeguarding yourself and your assets.

Gifting your child 50% of the property 

We strongly advise you take the option of 50% shared ownership rather than transferring the entire property to your child. To complete this, you will need the deed mottled ‘tenants in common’ Why? Simply because this protects you from 

• They can’t take debts out on the property 
• They legally can not evict you from the home 
• If they get married and then divorced, their ex spouse is only entitled to their share of the property – not yours. 

Benefits of adding child’s name to property 

You’ll see the benefits which fit some circumstances. Understanding thoroughly how they will service you for the better will help inform your decision. 

Getting your child on the property ladder 

You’ll be one of many who has recognised the harsh economic climate for first time buyers. Whilst there were multiple government schemes such as help-to-buy and shared ownership with the government with only 5% deposit, these schemes have drawn to a close as of 2021. 

Parents who are also property owners are seizing the opportunity to offer their children a shared ownership of the family home. 

As mentioned above, this would be carried out by you giving over 50% of the equity of the home to your child. 

Protecting your asset from a new spouse 

Modern families come in all shapes and sizes and at Bromfield we are well versed in accommodating all family set ups. Your new partner might come and live with you and you might be thinking now is a good time to safeguard your asset for your children’s sake. 

Putting their name on the deed in a 50% shared ownership would certainly do this. If you were to remarry with no prenuptial agreement or financial order in place, your new spouse could only claim the equity in your share of the property if you enter into a divorce. 

Avoiding hefty inheritance tax bills 

Inheritance suffers a chunky hit from Inheritance Tax. If your property is valued at more than £325,000, you’ll be looking at 40% tax on your inheritance.  

Gifting a property to your child 

The timing of ‘Gifting’ to your child should be taken into consideration. If you die between 1-7 years after you have given a gift to your child, the amount will be taxed. 

After 7 years the gift amount is no longer taxable. But within the first year if you were to die, the gift is eligible to be taxed 38%. The amount of tax decreased as the years add on. 

Why you shouldn’t add your child’s name to the deeds of your house

Here are some serious considerations as to why you shouldn’t add your child’s name to the house deeds

Your child will still have to pay capital gains tax 

Capital Gains Tax is the tax applied to increased profit on a property from the date it was bought to the date it was sold. 

If you purchased a property for £200,000 and now it’s worth £550,000, the capital gain is the difference between these two figures – £350,000. This is the amount your child will be taxed on if they sell the property. 

Your right to live and stay in the property 

Unfortunately, fallouts do occur and you’ll want to know your right as a tenant in the property you’ve handed over. 

Transferring 100% of the equity of the property to your child could really leave you in a vulnerable position. 

If they sell the house, it is within their right to evict you which of course is an unpleasant experience for anyone. 

Making sure you make the best decision and take the right legal action is what we do best. Get in touch with us at Bromfield Legal and speak to an experienced solicitor about your situation. We look forward to hearing from you soon.