Life Assurance Bonds

dunstonh

I had to do some Investment bond research this morning and couldnt see one provider that had an 8% charge. There were a couple that allowed an 8% commission to be paid but that of course is not the same thing as an 8% charge.

Also, it is now possible to get exactly the same cost on investment bonds as unit trusts so the cost argument is pointless to make as like all products, you can get cheap ones, expensive ones, good ones, bad ones and average. You never measure all products by just one example. That would be like saying you dont like ox-tail so you dont eat any meat.

jem16

dunstonh wrote: »

I had to do some Investment bond research this morning and couldnt see one provider that had an 8% charge. There were a couple that allowed an 8% commission to be paid but that of course is not the same thing as an 8% charge.

The OP did reply to me by pm saying that her dad had indeed mixed up commission and charges. I don't know who the provider is though.

UnrealisticExpectations

Why does everyone think it's such a bad idea to gift the house over? (That's a proper question, not a comment - answers very much appreciated, please!)

My mum is a 78 year old widow with a house work 190k. She has savings under 30k. I'm an only child with two small children of my own - obviously, both facing expensive futures with university fees, house prices, etc. My husband and I, my parents and my grandparents, etc worked hard all our lives and never claimed benefits. My husband works long hours in bad conditions to allow me to stop at home and care for the kids - and now for my mum too! Phew! For the privilege we pay an extra £300 a month in deductions over a couple - even without kids - with the same income split evenly between them. That's largely irrelevant, but the point is, I feel we're being stuffed and I don't want to get stuffed further!

We went to a solicitor, whose advice seemed very practical, and whose own mother had had to go into care. He advised us to write the house over to me (on the grounds of, "Well, what have you got to lose by doing it?") If she ended up in care quickly, then we've gained nothing, if she manages independently/with our help for 10 years, then we could make a case for the gift. He explained the situation with capital gains and, as I understand it, any liability for captial gains tax can be split between me and my husband, and the annual allowances accrue over the years - so unless property really sky-rocketed, we'd only have a minimal capital gains liability.

Maybe I'm living in a fool's paradise, but I can't really see any disadvantages - and, because we've no way of telling what might happen, there might even be advantages. She was coping well independently when we made the transfer, she had a period of illness about a year later which seemed to age her badly and she's now been diagnosed with Parkinson's and had become a bit confused. I've made the commitment to caring for her in her home. If she gets to a point where she can't cope by herself, I'll move her into our spare room and care for her in our home. I'm hoping she'll be spared the necessity to go into care but, if it comes, it'll be a last resort. As I say, maybe it's a fool's paradise, but I feel a lot happier that I own now own the house and I'm in control of that aspect of it - even if it meant self-funding care, I'd rather have hold of the purse-strings, and it's a relief to me that the house is already 'mine'.

Is there something I'm missing?

Savvy_Sue

UnrealisticExpectations wrote: »

Is there something I'm missing?

If there is, I can't see it on a superficial reading. However, I'm no expert.

You've thought about this, you've taken advice, and you're aware of the possible pitfalls. Hopefully your mum had some independent advice too (because one of the pitfalls for HER is that as it's now YOUR house not hers you could sell it over her head!)

And you don't seem to have done it with a determined "We don't want to pay for a care home and this will avoid it" attitude.

Just a thought though, if she can't cope on her own, is you lot moving into her home a better proposition than her moving into your spare room? I'm sure you'll have thought about that too ...

EdInvestor

UnrealisticExpectations wrote: »

We went to a solicitor, whose advice seemed very practical, and whose own mother had had to go into care. He advised us to write the house over to me (on the grounds of, "Well, what have you got to lose by doing it?") If she ended up in care quickly, then we've gained nothing, if she manages independently/with our help for 10 years, then we could make a case for the gift.

So far so good. If there is a long gap between the gift and the need for care the council would find it more difficult to argue the case for deprivation of assets.

He explained the situation with capital gains and, as I understand it, any liability for captial gains tax can be split between me and my husband

Correct if the house is in joint names.

and the annual allowances accrue over the years

Wrong.You only get one CGT allowance in the year that you sell it.

In addition, clearly your mother did not get independent advice.If she had she would have been told about the risk that she might lose the right to live in her home due to your possible future death before hers, your divorce or your bankruptcy.No solictitor will normally advise a parent to go this route because it is too risky.

I'm hoping she'll be spared the necessity to go into care but, if it comes, it'll be a last resort.

She has also lost the right to use her own assets to pay for the best possible care should she wish to do so. She will be forced to go into council-funded care and will have to put up with what they offer.

The solicitor should have insisted that your mother had her own legal advice.