Lending a house

latedeveloper

This is my first go at this, so apologies if the answer to my question has already been answered somewhere and I just haven't found it.

We have started a slow and intermittent 'move' from the house where we lived for 40 years to another house. My wife is disabled and I was working until recently, which is why we are taking longer over this than is normal. So temporarily, we have two houses, and we pay 100% council tax on one and 90% on the other one (and, yes, it is crippling, but that's just how it is right now).

Our daughter and son-in-law are trying to move (from a location nearish to us to a location a bit further away). After 18 months they finally have a buyer but currently no acceptable house for sale where they want to move to. So they are thinking about moving to rented accomodation until something comes up.

If we were to loan our old house to them for a few months, they would still have to do two moves, but they might save £800/month for a while.

I'm thinking we have to tell the local council as it would be dishonest to claim the 10% discount on the council tax while this goes on. What I don't know is whether there are any other complications, tax or otherwise, which we should think about. The house used to be our primary (only!) residence for 40 years and we know we will need to have sold it within 3 years of moving out to avoid complications with CGT, but we don't want to wander ignorantly into any other minefield.

I wonder, has anyone else done anything like this recently?

Fire_Fox

Wouldn't it be cheaper just to pay a removals firm to do all the packing and unpacking? Are you intending to charge your relatives ANYTHING as regards rent or will they be paying anything on your behalf? If so you would legally be landlords and they tenants with all the rights and obligations that entails.

If there is a mortgage on the property you will need to check whether you need consent to lease and if they will permit letting to family (often not allowed), inform your buildings and contents insurers.

You would need to close and settle all your accounts for household bills. They will then need to register to pay council tax, go on the electoral roll, pay all the utility bills. If they give you money for utilities you would need to complete tax returns and will likely be deemed a landlord.

latedeveloper

Thanks, Fire Fox, for that prompt response.

The way this is going, I'm beginning to see that nowadays to do anything the least bit 'non-standard', no matter how simple and natural it is, can bring more complications than doing something complicated but fairly 'normal'.

I think this could only work if we manage to keep it so simple that no legal landlord/tenant obligations are created. Even then, we would have the insurance to sort out.

Food for thought!

Fire_Fox

It's not that complicated, there has to be a line drawn and money changing hands directly or indirectly is a reasonable one IMO. The rules are in place largely to protect tenants from shyster landlords, make sure tenants have clear rights not to be evicted on a whim, to have a private, safe and well repaired home. A guest obviously has few such rights.

Nothing stopping your children thanking you for letting them stay with a Christmas gift (furniture/ white goods/ media gadget) that might happen to be worth the same or more as any costs you incurred such as new insurance policy. But keep that modest, if you are talking larger sums then do it properly, otherwise you are into tax evasion territory.