CTG implications.....Pls help!

Benny24

My mother lived in my grandmothers house for years whilst grandmother was alive, paying towards the upkeep etc, and when she died 11 years ago the house was left to her in my grandmothers will. Grandmother had no other assetts apart from the house and that did not exceed inheritance tax thresholds at the time. Mother has continued to live in the house.

My Mum has now decided to move, and the house is on the market for £169k.

Once sold, My Mum is going to live in my house, paying off my £60k mortgage and giving me £20k deposit for partner and I to buy another house, and the sale will release assests for my mother to live on.

Firstly what IHT implications will Mum have on selling her house?
and
Secondly what CTG implications will it have on me? Especially if I come to sell my house sometime down the line when when my mother passes away? The house (that mum will be living in) will be remaining in my name.

Any help gratefully received! :T

cash99

No CGT or IHT implications on your mothers sale of her house, assuming that it was her principle private residence (PPR) for the first 8 years of the 11 she has lived there since inheriting.

The gift your mother is making to you of £80k is a potentially exempt transfer for IHT pruporses. Assuming she lives for 7 years after the date of the gift it will be completely exempt from IHT. Should she die within 7 years, then it will depend on the value of her overall estate. If her estate is below the IHT threshold then there is no issue.

If her estate is below the IHT threshold then this is not a very tax efficient way of organising your affairs. After 3 years your PPR exemption will no longer apply and a proportion of any gain you make on the eventual sale will be subject to CGT. This would not be the case if you mother owned the house and you subsequently inherited it.

Secondly, as unlikley as it may sound now, this also leaves you mother exposed to being homeless, as she no longer owns her own home.

There may also be issues relating to the payment of care fees in future.

All in all it would be well worth seeking professional advice.

Benny24

Would it be better to put my mothers and my name on the deeds to the house then? Would this help the CTG should the house ever need to be sold in the future?

Also money she has left from the sale of her house will be put into savings should she require care fee's in the future.