buying a bungalow for an elderly parent

sistercook

[FONT=Verdana, Arial, Helvetica]We would like to move my mother to a bungalow; my mother owns her home but does not have sufficient capital to purchase a bungalow in her own right and presently receives benefits which she depends upon.

We are prepared to help with the purchase but need advise on how to protact our capital should she need to go into a care home in the future.

Any information will be greatly appricated.

many thanks
sistercook[/FONT]

xylophone

See a solicitor so that your and your mother's positions are protected and any wills/IHT matters sorted out.

Let's say the bungalow costs £100000 but your mother can only raise £60000 from the sale of her property.

You could lend her the £40000 interest free on the basis that if she sells or has to move out of the property, the loan must be repaid with RPI uplift (to protect the buying power of your investment) - you would take a first charge on the property.

You could also consider buying the bungalow as tenants-in-common with the appropriate shares recorded for you, your husband/siblings(?) and your mother. Bear in mind any CGT consequences of this course of action.

Make sure that the solicitor draws up a legally binding agreement and that any charge is registered at the Land Registry.

sistercook

Many thanks Xylophone - next stop solicitors