Helping mother-in law buy new home

rudebh0y

My mother-in law is looking at buying a home that is about 30K more than what her current one is worth. My wife and her son are willing to put up 15K each to allow her to buy it. What tax implications does this have immediately (if any) and indeed down the line for inheritance?

laurel7172

My first reaction is that it would be worth considering getting their names put on the deeds as owners of whatever % they've paid for, to make sure that they get it back should the house have to be sold for care home fees. Otherwise, it's a gift to mil and part of her estate.

rudebh0y

Could the new how be put into there name in its entirety? And if so is it taxable? As they will get it anyway on her death ?

laurel7172

The house could be put into their names, but, unless mil paid your wife and her brother a commercial rent, it wouldn't count for IHT purposes until her death. But the CGT clock would start right away, so they'd be liable for tax on the increase in value of the home between now and mil's death (which hopefully will be many years away).

Also, if mil doesn't have £30K in savings to fund her own move, at a guess, should it become necessary, she'd be unlikely to have the money to pay care home fees without selling her house. You can't avoid this by transferring the house to her children now, as the council won't pay the fees for people who have deliberately given their assets away.

rudebh0y

Thanks laurel7172, lots of food for thought.

Still a bit confused on what is best course of action.

The figures are that her fully paid up home is worth £120k , New home is £150k. So either her son and daughter help her out with the £30k shortfall and get their name on the deeds or mil takes out a £30k mortgage but she is 66 yrs old so may have a problem there.

As house is unlikely to ever get above IHT threshold. Would it be best to just leave it at that or somehow gift away the home in the coming years .