Complicated family situation...

kazza169

I was wondering if somebody can offer me some advise.

My husbands sister & her family we're going to be buying their grandmas house off them to enable her to live with them so they can care for her, but they've been refused a mortgage on the basis that if they ever fell behind with payments that they couldn't evict an elderly person.
So the next thing is the grandma is going to sign the house over to her, so dis inheriting my husband & her other 2 grandchildren. This isn't my main concern as that could never happen if she was to go into a home etc.

My questions are will they be liable for capital gains tax or any other kind of taxes? And legally where would they stand if they become unable to care for her & she went into a home? Also if they decided in a few months that they can't care fe her anymore would my husband have any claim to the fact that they've gained the house but aren't fulfilling the purpose it's been given to them for?

Sorry that's a bit long winded & I hope it makes sense!

CLAPTON

kazza169 wrote: »

I was wondering if somebody can offer me some advise.

My husbands sister & her family we're going to be buying their grandmas house off them to enable her to live with them so they can care for her, but they've been refused a mortgage on the basis that if they ever fell behind with payments that they couldn't evict an elderly person.
So the next thing is the grandma is going to sign the house over to her, so dis inheriting my husband & her other 2 grandchildren. This isn't my main concern as that could never happen if she was to go into a home etc.

My questions are will they be liable for capital gains tax or any other kind of taxes? And legally where would they stand if they become unable to care for her & she went into a home? Also if they decided in a few months that they can't care fe her anymore would my husband have any claim to the fact that they've gained the house but aren't fulfilling the purpose it's been given to them for?

Sorry that's a bit long winded & I hope it makes sense!

have they tried a mortgage broker to find some-one that will give a mortgage in those circumstances?

there are several financial things to consider
-cgt
-IHT
-deprivation of assets

if granny gives the house then there is no cgt as it was her primry residence

if her total state would be liable to IHT then the gift would still be counted as part of her estate for IHT as by continuing to live there it would count as a gift with reservation.

if, after giving the house away, she needed state funded care then the council could recover the money from the house as it could be seen as a deliberate attempt to avoid payment.

once the house is given away and unless there are specific agreement otherwise, then sister in law could kick granny out and enjoy the house without any constrainst.



however, why does granny have to give the house away?

why can't the sister in law live rent free in granny's house whilst granny retains ownership?
granny can then make a will specifying what happens upon her death

kazza169

Thanks for your response.
This has all gone through now despite mine, my husband & their dad's concerns!
We're just keeping our fingers crossed that it all works out ok as they're about to spend £20k bringing the house up to a good standard as it's a bit run down so they really are taking a big gamble especially when they have 2 young kids, a puppy and my sister in law doesn't work!

So from here I guess we'll just see what happens and hope they do everything right as there are definitely a few tensions that I could easily see occurring!