Should we transfer home to daughter?
RENFREWSHIRE CITIZENS ADVICE BUREAU ANSWERS YOUR QUESTIONS
I’ve received a wages arrestment from a sheriff officer for council tax arrears. I thought they would have to go to court where I would have the chance to dispute the amount. Is this allowed or have they broken the rules?
There is a different collections (summary warrant) procedure for council tax arrears.
It’s often referred to as “fast-track” because it can skip part of the process.
You’re right in thinking that for a lot of debts – for example credit cards or unsecured loans – they would have to follow the process of going to court and asking the sheriff for a decree.
Then, if successful, at that point the creditor can look at further action to recover the debt.
Council tax arrears collections can miss this first step.
Basically, when you’re in arrears with council tax, a sheriff officer can issue a “charge for payment” without ever having gone to a court hearing.
After 14 days the charge has “expired” and if no arrangement has been reached then the sheriff officer can then go for a wages arrestment (among other options).
This is one reason it is important not to ignore council tax arrears and to look at options to deal with them at an early stage.
We often refer to council tax arrears as a priority debt for this reason.
The council do have to follow the summary warrant procedure correctly, so it is worth checking this has happened and a Citizens Advice or other free debt adviser can help with this.
If the summary warrant has been issued correctly, it is still possible to dispute the amount owed.
There are also options for dealing with debt that can lift the wages arrestment, which may suit your circumstances.
Contact the CAB on 0141 889 2121 to discuss this.
As my wife and I are getting older (we’re both retired), there’s been a lot of talk in our family about transferring our (bought) home into our daughter’s name to protect it. Is this something we should do?
Whilst it is a nice thing to want to pass on property to your children, there can be far-reaching consequences to doing this.
Transferring your home to someone may be seen as having been done to avoid care home fees or inheritance tax, and so this action might not achieve what you want it to.
We find that there is a misconception with care home fees that if the property was given away a number of years ago (e.g. more than five years) then it is ignored for the purposes of assessment of care home fees.
In reality, there is no time period and this can be investigated as disposal of an asset by the council regardless of how long ago it was.
Disposal of an asset is when an asset is given away for less than the market value.
As a result of this, the property can be recovered from the person it was given to and potentially sold to meet unpaid care home fees.
In regards to inheritance tax, whilst giving the property to a husband or wife or civil partner is tax free, if the transfer of the property was to their children and was intended merely to evade inheritance tax then the recipient will still be liable to pay this.
This is quite a complex area and it may be worth getting some legal or specialist tax advice on this specific to your circumstances.
(Corrigan)
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