Advice needed re sitting family tenant - liabilities and tax breaks??

zanzotto

I have owned my 87 year old aunt's 2 bed flat for 9 years (originally purchased by her under the council right to buy scheme using money loaned from me, then gifted to me after 3 years had lapsed.) I have never taken a penny in rent and there is no official tenancy agreement. I pay all buildings insurance, maintenance costs, service charges (communal block) and a landlord policy for boiler, electrical, gas, water breakdown etc. She pays all utility bills. Am I exposed to unforeseen liabilities in the event of her death/needing social care? Am I missing out on potential tax breaks (there is no rental income to offset my costs.) How else might I set up this arrangement?

RAS

Google deprivation of assets.

Also look at CGT liability and the IHT (although only if her assets exceed the limit).

theartfullodger

You had a HUGE subsidy from taxpayers in buying the place at a discount and now you want more tax breaks?

What does the taxpayer get out of your dubious activities?

More front than Brighton....

BitterAndTwisted

She's 87 now so it may not be that long before you can cash in on your investment. If auntie's lucky enough not to need an extended stay in residential care beforehand or the roof doesn't fall in first.

xylophone

using money loaned from me, then gifted to me after 3 years had lapsed.)

She borrowed the money from you to buy the property then gave it to you in lieu of repaying the loan?

She borrowed the money from you, paid it back and then she gave you the house?

If she needs care, "deprivation of assets" is likely to be considered?

BitterAndTwisted

Evict the old bag and sell the property! She'll probably be allocated a nice, comfortable sheltered-housing place somewhere and you'll be quids in! You might be off her Christmas card list, but who cares about that where cold, hard cash in concerned?

zanzotto

xylophone wrote: »

She borrowed the money from you to buy the property then gave it to you in lieu of repaying the loan?

She borrowed the money from you, paid it back and then she gave you the house?

If she needs care, "deprivation of assets" is likely to be considered?

Thanks for your reply. Ref your questions, under 'right to buy, she had to purchase the flat in her name but I funded the full purchase price. She has not returned the money borrowed. After circa 3 yrs, beyond the constraints imposed under council right to buy rules, she 'gifted' the property to me transferring deeds and ownership to my name. There was never any intention of 'deprivation' of assets. Circa 13 years ago when she bought it she was fit and healthy and fortunately remains so at the current time.

Guest101

zanzotto wrote: »

Thanks for your reply. Ref your questions, under 'right to buy, she had to purchase the flat in her name but I funded the full purchase price. She has not returned the money borrowed. After circa 3 yrs, beyond the constraints imposed under council right to buy rules, she 'gifted' the property to me transferring deeds and ownership to my name. There was never any intention of 'deprivation' of assets. Circa 13 years ago when she bought it she was fit and healthy and fortunately remains so at the current time.

So you own it outright?

zanzotto

Yes. I funded the original purchase but it had to be made in her name as the council tenant. Under right to buy rules, the council tenant had to retain 'ownership' for 3-4 years before the property could be sold on. So on paper, she 'owned it' for that length of time to comply with the rules but the understanding from the outset was always that it would be transferred to me.

G_M

You have misunderstood "deprivation of assets".

Google it.

It will become relevant if she ever needs means tested care.

Torry_Quine

zanzotto wrote: »

Thanks for your reply. Ref your questions, under 'right to buy, she had to purchase the flat in her name but I funded the full purchase price. She has not returned the money borrowed. After circa 3 yrs, beyond the constraints imposed under council right to buy rules, she 'gifted' the property to me transferring deeds and ownership to my name. There was never any intention of 'deprivation' of assets. Circa 13 years ago when she bought it she was fit and healthy and fortunately remains so at the current time.

How has she not returned the money when she gave you the flat!

If she needs care then deprivation of assests could still come into play as the intention is what's important.

You have gained a property at a discount, what on earth more do you want?