Tenants in common

oap

Well I had no idea I would start such a discussion but thank you very much for all the input.

As it happens, my friend's husband has Alzheimers now and he is 84 and she is 80 this Thursday, she is fairly fit, and is looking after him at home and as he is doubly incontinent, I do not know how she does it, she is in Manchester area. She says a lot of the homes are closing down,and apartments going in their place, and anyway she will soldier on as long as she can cope, but it is very very hard.

We are 71 and 76, and hearing of this tenants in common, we were wondering whether to do the same, no mortgage now of course and on a low income but too much to get any benefits, and some money in the bank.

Yes we have one son, he told us long ago he did not expect anything from us,and we trust him completely, however, we most certainly do want to make sure he gets our house or part of it if at all possible, when I was working as well as his dad he went to his Nans during the school hols and after school, Had I not worked, we would not be here now as we were able to buy a better house etc., and worked very hard which enabled us to move from Manchester to North Wales,when my husband was made redundant. So we feel our son should share in this as he was not at home as much as we would have liked.

I daresay this will cause an uprising on this thread, but like you say we all please ourselves.

However, we have food for thought now, and had not realised that tenants in common was a form of trust. We had thought of going to a financial adviser but never have done in the past and coped very well sorting ourselves out. We do not really know who to go to and whether we can trust them to give the correct advice. We will have a look around the other threads and see what others have to say.

We had thought of eventually, but not yet, as God willing we are in good health at the moment, of doing the Equity thing, but there seem to be very serious difficulties here too.That way though, you can please yourselves what you do with the money. Our house is worth about £280000 at present day. We had thought of downsizing, but having spent twenty one years getting our home virtually maintenance free, we do not feel like starting again. As my husband was made redundant at 53 after 30 years with his company it has been quite a struggle.

It does make us cross though and many of our friends of our age too that we paid all our taxes, nhs contributions etc, and have to pay for our care when somebody who did not pay anything, gets the same care free. Its a wonder everybody isnt moving to Scotland!!

Cheers and thanks again, oap

EdInvestor

The council will never take the house to pay for care while the spouse is still living in it.

OAP could look at self funding any care that's needed using equity release from the home:

http://www.sharingpensions.co.uk/annuity_immediate_needs.htm

It's much better to self fund if you can as you have far more control of the choice of home, location, and standard of care.

Whatever they say, you get what you pay for.

[Deleted User]

the 7 year rule and other ways of giving to children

http://www.thisismoney.co.uk/help-and-advice/advice-banks/article.html?in_advicepage_id=103&in_article_id=396128&in_page_id=90

in our case, the 3 children are home owners on the first 2 rungs. 2 of them are really struggling, so a gift now and then is a real lifesaver. We could very well live another 40 years or more and the very idea of putting half the house value in trust for that length of time is a no no. 40 years is a long time on savings and accrued pension, unless gold star index-linked of course

Margaret, good luck with the op. Will be thinking about you

margaretclare

Errata wrote: »

Rodders, I'd just like to make the point that whilst sm*art*rse financial advisors and legal eagles are finding loopholes so people won't have to pay for their care, amongst the people who will be forced to pay for it through local and national taxation are pensioners.

Yes, this is true. Some of us are pensioners AND still paying tax - income tax as well as council tax.

oap, you've discovered that this is not a straightforward question. another thread here shows what the complexities will be: http://forums.moneysavingexpert.com/showthread.html?t=452542

I agree with 7DW, at 60 one can easily live another 40 years, and that's far too long to be tying things up tightly now. Deaths, divorces, remarriages, births of grandchildren and step-grandchildren, bankruptcies, all can affect decisions made in advance.

My only 'axe to grind' has simply been that I do hear an awful lot of ill-informed and simplistic talk about 'if you do this the council/taxman can't grab your assets' and often, shall we say, it's from a younger generation who think their parents' assets should be theirs!

People ask me why I'm still saving. It's simply that DH and I like a good standard of living and also, we don't know what the future may hold. If need be I'd like to think that we could afford that 'platinum-standard' nursing home if the worst ever came to the worst.

Kittie, thanks for good wishes. It won't happen yet, but it does mean I can't risk standing in airport check-in queues for long periods and there are a lot of personal problems which are easy to deal with at home but not in a strange country, airports, all those kind of things. We are still thinking of driving up the Rhine Valley from Rotterdam to Bodensee - that would be easier because it would all be travelling by car, stop where we like etc, also it's not so far away. We're also thinking of getting away for Christmas to perhaps a country house hotel in the West Country, something of the sort - but it all depends on NHS waiting lists!

Best wishes

Margaret

oap

Will have another look at all the info you have so kindly given us.


Some more questions for anyone on here who might be a financial adviser,

1 What is the seven year rule exactly, what does it apply to?

2 Can you make over your house entirely to your son ? I have had snippets of info on working lunch on BBC, and I think they have made it that you then are assumed to pay rent and they have to pay tax on it.

3 Can you make absolutely sure that your son keeps the property and any partner or spouse cannot get their hands on it if there is a divorce or death.

Sometimes its easier to stick ones head in the sand and do nothing!!!

Regards and best wishes oap

oap

PS I do not think it makes any difference to anything but we are not tax payers as my husband was born in 1931 we still get the married mans allowance and our income falls way below what we are allowed. regards oap

margaretclare

oap wrote: »

PS I do not think it makes any difference to anything but we are not tax payers as my husband was born in 1931 we still get the married mans allowance and our income falls way below what we are allowed. regards oap

Hi again, oap (back from the dentist's just now)

We got married in January 2002 and DH is just within that 'married allowance' age-bracket - he was born in December 1934 and one of you needs to have been born before April 1935.

What we do is to split the married people's tax allowance between us, to set against our individual income. This has been possible since the 1990 Budget and I was one of the people who campaigned for this over 20 years. It always seemed to be to be highly unfair, patronising and sexist that the Revenue would write to my (late) first husband about the tax that I had paid on my earnings! I even spoke to Nigel Lawson, the then Chancellor, about this anomaly back in the mid-1980s and he agreed with me.

Because we receive our pensions and annuity incomes separately and are taxed separately, we don't fall into that 'clawback' trap which - I think - comes when the couple's income reaches approx £21K.

The husband has to write to his tax office saying he wishes to split the married allowance with his wife.

HTH

Margaret

PS: Hopefully Willman Rodders will be along to answer your questions. AFAIK regarding questions 2 and 3: If you give your house to your son but continue to live in it, then you have to pay an economic rent on it, according to what is being charged on similar rented properties in the area, otherwise it's what is called a 'gift with reservation' (you give something, but keep it!) The rent becomes part of your son's income and he has to declare it on his tax return and pay tax on it. 3: if you give it to your son, even though you're living in it, it's his, and in the event of his bankruptcy, divorce, all those kind of things, it's part of his estate not yours. Having given it away you can't legislate on what may happen to it.

I'm not any kind of an adviser but I've done quite a lot of reading and as I said, I've seen these type of questions come up time and time again.

EdInvestor

oap wrote: »

1 What is the seven year rule exactly, what does it apply to?

If you give capital away above the annual allowance it becomes a "potentially exempt transfer" and won't be liable to IHT if you survive for 7 years.Note BTW that there is no IHT on estates under 300k in value.

2 Can you make over your house entirely to your son ? I have had snippets of info on working lunch on BBC, and I think they have made it that you then are assumed to pay rent and they have to pay tax on it.

Yes.Also he would have to pay capital gains tax when he sold the property as it's not his main residence. Basically, this idea only really works if their is one surviving parent and the child is living in the home with the parent.

3 Can you make absolutely sure that your son keeps the property and any partner or spouse cannot get their hands on it if there is a divorce or death.

No you can't, which is why it's not a good idea.

oap

OK thanks a lot for the info, seems for now we shall have to stay as we are, and yes we get around £21k tax allowance, my only income is small amount of interest and old age pension of £52 a week, husbands is old age pension and company pension, and we are thousands less that what we are allowed.

Its ok with hindsight, but alas none of us know how long we have got!! May be a good idea once one is around 80 and hopefully both still alive, that it goes to the equity company, well some of it, then as said before, we can do what we like with it. Best wishes and thanks again for all the help and input, oap

margaretclare

oap wrote: »

Its ok with hindsight, but alas none of us know how long we have got!! May be a good idea once one is around 80 and hopefully both still alive, that it goes to the equity company, well some of it, then as said before, we can do what we like with it. Best wishes and thanks again for all the help and input, oap

It's absolutely true that none of us know how long we have got, and I'm probably more aware of that than most people, since my younger daughter died at the end of 2002 aged 39, completely unexpectedly.

However, there are statistics which show that, assuming you've lived to age 65 and haven't got a life-shortening disease, you stand a good chance of surviving another 20 years at least. DH and I look at things from that perspective and we're still saving, because none of us knows (a) how long we have got and (b) just what is around the corner. We are therefore not thinking in terms of 'what might happen to the house if one or both of us needs to go into a home' but rather, as Kittie said, we'd like to afford the platinum-grade home rather than give all our assets away and be condemned to the lowest common denominator of means-testing and a cash-strapped council.

If we don't need any home of any kind (apart from our own) then the 5 grandchildren will eventually get a nice little windfall each.

Margaret