Advice on 2nd house?

ben2909

Looking for a little advice before I contact a solicitor.
I currently own a home with my wife which we have a small mortgage on.
My mother owns her home (no mortgage) and would like to either add my name on the deeds or change ownership just to my name.
She is in good health and only early 60's.
Would I be liable to capital gains tax or any other tax/problems should I sell the house after she dies?(hopefully not for. Very long time)
If we sell the house so she can move?
She will still live in the house if she doesn't want move.
Thanks

BitterAndTwisted

What's her motive for wanting to sign the house over to you and does she realise what a massive risk she might be taking?

As well as you seeking professional advice I think she should seek some separately, too.

00ec25

a) yes you would be liable for CGT from the date of transfer into your name to the date you sell it

b) yes mother's estate would still be liable for IHT since she continues to live in it

c) yes mother could be held to have intentionally deprived herself of an asset should she want to claim any means tested benefits in the future

d) yes mother can still live in it even if you own it, assuming you do not need a mortgage to buy her out, ie she gifts it to you and lives there rent free - notwithstanding a) b) or c)! If you charge her rent then that introduces exposure for you to income tax and the concept of notional income if she pays you less than the full open market rental value, for avoidance of doubt - if you don't charge her rent then this is irrelevant. If you need a mortgage to buy her out then her continued occupation could become a problem as lenders do not like renting to family or occupation rent free by ex owners

ben2909

There would be no mortgage as she would be gifting it to me.
She isn't entitled to ant means tested benefits due to her pensions.
I wouldn't be charging any rent and she would be responsible for any repairs.
House is worth around £150000 so IHT won't be a problem.

00ec25

ben2909 wrote: »

There would be no mortgage as she would be gifting it to me.
She isn't entitled to ant means tested benefits due to her pensions.
I wouldn't be charging any rent and she would be responsible for any repairs.
House is worth around £150000 so IHT won't be a problem.

then i fail to see the point of the transfer.

If she did not gift it now, the amount of money you get get in your inheritance would be more since there would be no reduction due to the CGT you will have to pay when you sell if you become owner now rather than selling on inheritance

if you do not intend to sell on inheritancne then there is no benefit in you being an owner now

if there is no exposure to IHT then there is no need to transfer it to avoid IHT

if she can predict that she will not need means tested benefits then there is no need to transfer it to attempt to avoid them

all the transfer now will achieve is cost money in fees and reduce your inheritance

martindow

I can't see any advantage for your mother in this idea but lots of downsides. What would happen if you were to die, go bankrupt or get divorced? She could be given notice as a tenant and the house sold as a settlement.

If the plan is to get the rest of us to pay for her care in the future, hopefully deprivation of assets should scupper that. There seem to be endless downsides but no advantages to anybody in this idea.