Buying House - Mum moving in

Dual

Hi all,

Im in the process of selling my home to purchase a larger residence so that my mum can come and live with us. She has lived alone now for 7 years, shes late 70's and very lonely, health is manageable, no major illness, she still gets about like a trooper, does her shopping, goes out occasionally, but most of all she is very lonely and longs for company....but not a "relationship".

We all get on very well, my hubby and my kids etc, im her only daughter. I have a brother....but he is admittedly not very good with mums needs and lives quite far away.

We've now put mums house on the market and after paying back what she owes on her property - approx £60k (im guarantor for this), the remaining funds will go towards the costs of the larger property with some put in an account for anything needed in the future.

I just want to check whether Im breaking any laws, rules etc by usings mums money along with ours (from the sale of my property) to purchase the house. There will still be a mortgage of approx £100k which my hubby and I will pay. Will I be liable for any taxes etc do you know?

Are there any other considerations (other than the usual for an elderly parent to be living with us) Would this be seen as a gift in anyway although its where she will live?

Has anyone else done anything similar?

Many thanks

Linton

Who is going to own the house? Is mum giving you the extra money or will she own a % of the house? If she gives you the money and something catastrophic happens, eg your death or divorce, she could be homeless. On the other hand if she owns a % of the house what happens should you wish to move. What happens when she dies?

G_M

1) Is your mum arranging this or you? Do you have Power of Attorney? Is your mum in fullcontrol of her faculties? Does she fully understand/agree?

2) who will own the house? (whose name(s) on the Title? on the mortgage?)

3) if the house/money comes to you, it is a 'gift'. As a gift it would still be included in your mum's Estate in the event of her dying within 7 years (though with pro-rata allowances)

4) as a gift, also, it is no longer her house/money - that might leave her vulnerable financially (eg: you get made redundant, house is repossesed, mum is homeless!)

5) If she were later to need residential care, and the council means tested her, they may (may) define the 'gift' as 'deprivation of assets' (google it) and conclude she gave the £ away in order to qualify for benefits

6) If the mortgage is in your name, the lender may impose conditions on which adults can live in the property (to protect themselves if they need to repossess the property and evict the occupants). This can usually be managed by the adult (your mum) signing an agreement that she has no rights to the propertyso she could be evicted if you defaulted on the property.

sorry if language is a bit blunt, but I think those are the key issues to consider....

InMyDreams

http://www.hmrc.gov.uk/inheritancetax/pass-money-property/pass-home-to-children.htm#4 is relevant, I think:

However, if you sell your home, give the money to your children and then move into their home - whether this is into a granny annexe they've made for you with the money or a room in a house they have purchased - there could be Income Tax implications. You may be classed as living in a pre-owned asset if you don't pay the market rent.

Dual

thank you all for starting to throw these questions and considerations at me. Food for thought and I will copy and print off so I can discuss this together with mum and my husband.

If anyone can think of any other material information I should be aware of, feel free to post.

Thank you all

Annisele

If the house is going to be in all three names, you might find it *very* difficult to get a mortgage for the other £100k. The problem will be that names on the mortgage usually have to match the names on the house - and your mum will be too old for the vast majority of standard mortgage loans.

sonia1976

I am possibly finding myself in the same situation, only I have a sister. What would happen to the house if my mum were to die suddenly once we bought house together? How can we sort something so we are not left having to sell up to pay my sister her share? Mum wants to live in an annexe with us, but we currently rent. So we would have to buy somewhere else to accomodate her and our large family (we have 6 children). I'm getting very stressed as I love our current home, but as it is rented am unable to bulid extension for mum. I don't really want to move.

BitterAndTwisted

Your sister would only have "a share" of a co-owned property owned as joint-tenants if your mother either died intestate or co-owned the property with you as tenants-in-common and left a share of her assets to your sister in her will.

If your mother wanted to be certain that you and your family are not rendered potentially homeless in the event of her death she needs to ensure that you will inherit all of her share of the property.


I suggest that both you and your mother get independent legal advice from different advisors.