Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Sjwalls
    • By Sjwalls 17th Jun 17, 8:33 AM
    • 1Posts
    • 0Thanks
    Sjwalls
    Buying a house 'with' Mum
    • #1
    • 17th Jun 17, 8:33 AM
    Buying a house 'with' Mum 17th Jun 17 at 8:33 AM
    My Mum is upping sticks and moving nearer to us as she is now in her early 70s. She's mortgage free and will be a full cash buyer on any new property. Is there any benefit or is it even possible for me to be named on the deeds as co-owner to her new property? Obviously we're thinking about long term implications, should she eventually need to go in a home or just when she eventually calls time.
    Any advice or previous experience welcomed.
Page 1
    • xylophone
    • By xylophone 17th Jun 17, 9:31 AM
    • 21,631 Posts
    • 12,440 Thanks
    xylophone
    • #2
    • 17th Jun 17, 9:31 AM
    • #2
    • 17th Jun 17, 9:31 AM
    should she eventually need to go in a home
    If you are thinking of a gift to avoid care home fees

    http://www.whentheygetolder.co.uk/care-fees-funding-and-deprivation-of-assets-the-rules/

    Your mother might wish to ensure that she has made a will.

    She might want to look into granting Power of Attorney.

    https://www.gov.uk/power-of-attorney/overview
    • G_M
    • By G_M 17th Jun 17, 1:08 PM
    • 39,643 Posts
    • 45,145 Thanks
    G_M
    • #3
    • 17th Jun 17, 1:08 PM
    • #3
    • 17th Jun 17, 1:08 PM
    Yes it's possible and legal. You simply put both your names on the purchase contract and on the Land Registry forms. And she hands over the cash to the seller.

    However as others have said, there are other considerations.

    1) CapitalGains Tax. It is not your main home, so if/when the property is sold (eg to pay her care costs?), you will have to pay CGT on your share (50% assuming you own 50/50).

    2) If you currently own a property (do you?) the purchase will be a 2nd property so trigger an addional 3% SDLT

    3) If/when she went into care, it is likely the lacal authority would consider your 50% ownership as either
    * a 'gift with reservation' by her - ie she gave half the house away whilst still remaining the sole resident, or
    * 'deprivation of assets' ie deliberatley giving an asset away in order to benefit from government benefits

    They'd both value the entire property to see if it exceeded the amount entitling LA care support, and force a property sale.

    4) the 'gift' of 50% of the property would remain in her Estate for Inheritance Tax purposes unless she survived 7 years.

    5) Any difficulties (eg financial) you get into in the future might impact her as creditors could put a Charge on 'your' property.

    6) if you are married, and get divorced (I know, but noone expects divorce till it happens!), your spouse could claim a share of the property, leaving your mum.....

    There may be other consequences to consider. It's not a simple decision!
    • Keep pedalling
    • By Keep pedalling 17th Jun 17, 5:01 PM
    • 3,137 Posts
    • 3,354 Thanks
    Keep pedalling
    • #4
    • 17th Jun 17, 5:01 PM
    • #4
    • 17th Jun 17, 5:01 PM
    My Mum is upping sticks and moving nearer to us as she is now in her early 70s. She's mortgage free and will be a full cash buyer on any new property. Is there any benefit or is it even possible for me to be named on the deeds as co-owner to her new property? Obviously we're thinking about long term implications, should she eventually need to go in a home or just when she eventually calls time.
    Any advice or previous experience welcomed.
    Originally posted by Sjwalls
    If she ever needs to go into care (and most people don't) then unless she wants to have no choice in where she ends up and is prepaired to risk being placed in some dreadful place, she needs to hold on to sufficient assets to retain control of what happens to her, so she should not give her home away unless she has plenty of other assets to fund care.

    As for making it easier after death, the reverse will actually be the case because you will be looking at a potencial capital gains tax bill to pay.

    Also consider what would happen to her in the event that you pre decease her, go bankrupt or get divorced. All of those events could leave her in a very dodgy position.
    • bob bank spanker
    • By bob bank spanker 17th Jun 17, 6:16 PM
    • 290 Posts
    • 412 Thanks
    bob bank spanker
    • #5
    • 17th Jun 17, 6:16 PM
    • #5
    • 17th Jun 17, 6:16 PM
    So am I to understand if she needs care, you wanted me and other tax payers to pay, so you can get $$$$

    I think I'll just go outside and enjoy the weather rather than say what I really think
    • cte1111
    • By cte1111 17th Jun 17, 6:22 PM
    • 7,058 Posts
    • 368,366 Thanks
    cte1111
    • #6
    • 17th Jun 17, 6:22 PM
    • #6
    • 17th Jun 17, 6:22 PM

    4) the 'gift' of 50% of the property would remain in her Estate for Inheritance Tax purposes unless she survived 7 years.
    Originally posted by G_M
    Unless your Mum pays full market rent to you (which would be taxable income) for 'your' share of the house, then however long your Mum lived after the gift, it would remain as part of her estate.

    The 7 year rule does not apply to Gifts with Reservations, which is what the house would be (as your Mum would still be getting the benefit of living in the house, so it is not considered a true gift).

    You would also need to pay CGT on the increase in value from the date of the transfer to when it is sold.
    Last edited by cte1111; 17-06-2017 at 6:25 PM.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,552Posts Today

7,934Users online

Martin's Twitter