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Can we do this??
nickbar
Posts: 5 Forumite
I am hearing conflicting advice on the following and was hoping someone in the forum could put things straight:
My mother-in-law is selling her property and the plan is that she would give us enough money from the sale for a deposit on a buy-to-let which we would then rent out to her. This would enable her to afford a better place than she would otherwise be able to. Some people we have talked to have said this wouldn't be allowed due to taxes, legal reasons etc. Anyone any ideas?
My mother-in-law is selling her property and the plan is that she would give us enough money from the sale for a deposit on a buy-to-let which we would then rent out to her. This would enable her to afford a better place than she would otherwise be able to. Some people we have talked to have said this wouldn't be allowed due to taxes, legal reasons etc. Anyone any ideas?
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Comments
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When you say "her property" is it her main or only residence (ie her PPR)? If so she will not be taxed on the proceeds and it's her money and se can do what she likes with it....
Except if she goes into care it looks like she was disposing of an asset to avoid using it to pay for care.
Next, on what basis are you getting the money for the deposit? It may have a bearing on the situation and on Inheritance Tax (IHT) issues.
Finally, will she be claiming Housing Benefit (HB) to pay the rent? It may be possible but you have to be careful how things are arranged. Local Authorities (LA) generally don't like to see HB being paid to close relatives.A house isn't a home without a cat.
Those are my principles. If you don't like them, I have others.
I have writer's block - I can't begin to tell you about it.
You told me again you preferred handsome men but for me you would make an exception.
It's a recession when your neighbour loses his job; it's a depression when you lose yours.0 -
nickbar wrote:Some people we have talked to have said this wouldn't be allowed due to taxes, legal reasons etc. Anyone any ideas?
It's not "illegal" but you may have all sorts of tax issues to consider (as Bob Property says).
You probably need some specific tax advice..... for the potential IHT issue that Bob illustrated and, of course, you will need to declare the rent she pays to you as income for tax purposes. There are some expenses that you may be able to offset against the rent, though.
Specialist advice needed, I'm afraid.Warning ..... I'm a peri-menopausal axe-wielding maniac
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Many thanks to Bobproperty and Debt_Free_Chick for your prompt replies. I'll obviously need to talk to a specialist as D_F_C suggests. Thanks again.0
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Also many BTL lenders don't like it if renting to relatives. Check this out as well.0
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