Urgent advice needed

Chichi_2

My mum aged 60 wants to invest in a BTL property but put it in my name.
She will put down the deposit and receive all rental income. She's not worried about inheritance tax as she plans to spend all of the income each month!!! Am I overlooking something here? We want to do things correctly.

If she dies before me, the property will still be mine and I'll receive the rent but if I die before her I'm not sure what should happen in a fair way.

Also it'll be an interest only mortgage, so should I take out separate life insurance or increase payments on an endownment I have?

Thank you

PoorDave

By rights if you die before her she should get the house, unless anyone else is involved.

I don't think this will necessarily happen automatically, so you may need to make a will leaving it to her.

Usual question - will the property in question definitely make her more money per month than putting her money elsewhere? i.e does rent more than cover mortgage etc. If it won't make money for you, your mum is better off holding onto the deposit money, rather than BTL'ing

Chichi_2

Thanks for replying. If I die first I'm not sure what my will should state as I have a child. If she dies first, I will receive all the income and still be the legal owner. As you said the only problem is if I get married and perhaps divorce.

By the way do joint owners have to be joint mortgagees?

A_Nice_Englishman

This all sounds horribly complicated!

Can't your mother just own the house herself and leave it to you in her will (with some IHT avoidance measures if appropriate/necessary)?

clutton_2

if she is 60 she will have to jump thru many many lenders hoops in order to get a mortgage at all to buy the house in the first place. lenders want to know they will be repaid over the whole term of the mortgage. they will neeed proof that she has an income into retirement which will sustain her normal life style and the repayments of this new mortgage.

""Can't your mother just own the house herself and leave it to you in her will (with some IHT avoidance measures if appropriate/necessary)?

i agree with this

Rimo2021

You might be able to leave the property to your child but leave your mother a life interest in the property. ie you child would legally own the property but your mother would control/receive rent until her death at which time your child would come into full possesion.

Edit: I'm no expert in legal matters so seek advice. I only know of this because it happened in my family... An unmarried/childless great aunt left her property to her nephew/nieces but left her sister a life interest in it - so if the aunt dies before her sister, her sister could choose to take up residence for the rest of her life (although the ownership will have passed to the nephew/nieces) at which time the nephew/nieces could sell up and divide the proceeds.

Its could have been a bit tricky because of inheritance tax - eg you could have a situation where the heirs have to pay inheritance tax on the value of the property but without the right to sell the property to realise the amount needed!! Luckily in this case there should also be enough money/investments in the legacy to cover this eventuality..