Second Mortgage

Thrugelmir

Pincher wrote: »

I hope we are pooling our resources, whether anecdotal or direct experience. I have no problems with somebody pointing out my mistakes, misconceptions etc. because it means I will have learnt something useful.

There are so many potential loopholes and red tape, with unanticipated consequences, that even professionals don't know about them. When I bought my mother's house, she had to sign a letter to the lender to promise to move out, and I had to promise to throw her out. My solicitor couldn't believe it, either. Well, it was a good mortgage, so she is living on the streets, and I throw a coin in her hat when I pass by: just kidding;). I wouldn't be surprised if Intelligent Finance demanded a similar promise. This is to ensure that they can repossess the property without throwing out a sixty year old lady with residential tenure.

I did inherit a property when my father passed way, and my accountant told me the CGT is reset on inheritance, based on the valuation at the time of Probate. In Peter L's case, I did not not know it was a gift from a living parent, which is a different scenario, which I do not have knowledge of.

I think Vigillant22 and Thugelmir is coming from the angle of if the Inland Revenue considers a particular manoeuvre suspect, then they have powers to revoke the CGT exemption based on extra rules dealing with deliberate evasion. The care home fee angle was worth noting, even though it's not relevant in this particular case, as we found out, through discussion.

I think this was quite a good thread, overall.

A lot better than the How do I buy a house with no money threads.

Also worth remembering that as circumstances change in the future, something which is not an issue at the current time can then retrospectively apply.

VIGILANT22

Pincher Quote There are so many potential loopholes and red tape, with unanticipated consequences, that even professionals don't know about them.

I think Vigillant22 and Thugelmir is coming from the angle of if the Inland Revenue considers a particular manoeuvre suspect, then they have powers to revoke the CGT exemption based on extra rules dealing with deliberate evasion. The care home fee angle was worth noting, even though it's not relevant in this particular case, as we found out, through discussion. I think this was quite a good thread, overall. A lot better than the How do I buy a house with no money threads.[/QUOTE]

Pincher thks for yr post....in bold italics is so true, when I hear some "professionals" debating on this subject it is quite alarming the lack of knowledge around and of course "clients" always want to hear a story in their favour...ie no problem, of course you can do it!!!

I am sure this forum has helped millions of people, however when it becomes a specialised area and people throw in their "2p worth" it does become concerning...As people do see this as "advice"...

Off subject another thread is running about buying a family home cheaply and renting back, no matter what is being posted about these schemes (SRB) the OP is adamant he /she can do it....

My posts are not to antagonise anyone, but when I see posts giving mis information it is infuriating....but hey I'm not going to lose any sleep over it.....Mistakes are made and those mistakes just create work for other professionals to pick up and sort out....So long live forums...:)

Peter_L

Thank you all guys and gals for the advice and discussion thus far - you're all right yet all wrong (in my case anyway) I'll elaborate more later during my lunch hour (I'm at work and on my break at the mo) but went to see a Solicitor during his 'free legal clinics' last night ...

VIGILANT22

Peter_L wrote: »

Thank you all guys and gals for the advice and discussion thus far - you're all right yet all wrong (in my case anyway) I'll elaborate more later during my lunch hour (I'm at work and on my break at the mo) but went to see a Solicitor during his 'free legal clinics' last night ...

Not all solicitors are specialised in this area of the law...also remember solictors are not qualified/authorised to give any financial advice.


http://www.solicitorsfortheelderly.com/public/cat.php/2.htm

Charterhouse

VIGILANT22 wrote: »

Charterhouse...You are completely incorrect...the 7yr rule does not apply in deprivation of assets/care home fees.....

also ....

The new owner may become liable for Capital Gains Tax at some point in the future.

If you are found to have deliberately deprived yourself of capital you will be treated as having ‘notional capital’ to the value of the capital you disposed of.

Googling gifted properties etc, will not give you the answers required here........

He specifically said he was going to pay for PRIVATE care. Plus his mother is below the CGT threshold anyway. I know you get some sort of personal kick from being all high and mighty on here, but you're more clueless than most of the poor sods asking questions, why don't you take a hike?

VIGILANT22

Charterhouse wrote: »

He specifically said he was going to pay for PRIVATE care. Plus his mother is below the CGT threshold anyway. I know you get some sort of personal kick from being all high and mighty on here, but you're more clueless than most of the poor sods asking questions, why don't you take a hike?

Charterhouse You are very poorly informed.....in cases like this a new owner can be liable for CGT!

Furthermore...apart from ill informed.....how about understanding the difference between a PRIVATE Housing association for the elderly and Care Home!!!

Quote: "mum will be moving to a PRIVATE Housing association for the elderly "

Charterhouse

VIGILANT22 wrote: »

Charterhouse You are very poorly informed.....in cases like this a new owner can be liable for CGT!

Furthermore...apart from ill informed.....how about understanding the difference between a PRIVATE Housing association for the elderly and Care Home!!!

Quote: "mum will be moving to a PRIVATE Housing association for the elderly "

Oh my god, bolding AND red type, you MUST be right!

VIGILANT22

Charterhouse wrote: »

Oh my god, bolding AND red type, you MUST be right!

One thing for sure...I know you're wrong...

Peter_L

Gentlemen (or Ladies !) please ...

I went to see a solicitor whose specialism is Property Law and has been practising since 1975 ...

He informs me that:-

As I am the legal owner of the property which was formerly owned by my parents (father passed away 5 years ago but it didn't stop Wolstenholmes sending him a letter for consent of the transfer but that's another story) then I cannot proceed with the porting of the mortgage unless my name was removed first and added later but to do this raises more questions than answers and cost more than I would actually save - !!!!!! I could have locked into 0.5% above BOE base for 17 years but ah well ... he also reminded me that as the house was gifted, IF may not agree to the port anyway. So that's out of the question, he didn't help either by telling me he had a lifelong tracker of 0.2% above base !

As far as the gifting of the house is concerned and as it was my parents only home, there is no issue with that - no stamp duty payable and as her estate is below the £325k threshold - no CGT is payable.

I'm not particularly worried about the Inland Revenue as my wife works for them !!! And as I said before - I'm not trying to pull a scam - as far as my mum is concerned, look at it from the point of view as her renting from a private landlord (forget that it is only for elderly residents) and I WILL BE PAYING HER RENT !!!

I am grateful for all for posting here and as a forum is designed to provoke thought and pooling of resources and responses I would like to think that anybody who is going through something similar would benefit from our experiences and knowledge but would request that we keep handbags in check and focus on what we can assist on please.

Now then back to my original question all those posts ago ...

ohwattagosiam

VIGILANT22 wrote: »

Off subject another thread is running about buying a family home cheaply and renting back, no matter what is being posted about these schemes (SRB) the OP is adamant he /she can do it....

Firstly, you are the only poster that has said this cannot be done. And secondly, as you brought SRB's up as a potential problem, I in turn read up about them on several sites including the FSA's, and subsequently formed an opinion on the matter. The problem with your posts are that they are not constructive. You appear to be only presenting obstacles rather than offering possible solutions. It's too easy to simply shoot down people ideas without coming up with any viable alternatives.