Advice on joint property with elderley parent

Puggirl

Hoping for some advice regarding my pensioner mum. She is selling her home and I already brought a flat for her (mortgaged) in my name. I was hoping that when the sale of her home goes through we will pay off the mortgage and transfer the flat into a shared equity in both our names. The flat will be her main residence.

Can anyone advise if there are any tax implications in doing this or anything I should be aware of? I have no siblings and am in her will to inherit her whole estate and this is worth much less than the inheritance tax level currently set.

Thanking you...

xylophone

You paid the deposit on the property which was very recently purchased?

What will be the mechanics of paying off the mortgage?

Will the property be owned as tenants in common such that the deposit will represent your share of the equity?

Puggirl

I paid the deposit and fees and will pay off mortgage with the money from the house sale. I am not worried about having exact shares stated as tenants in common, don't mind it being joint.

It's all a bit new to me...

Cook_County

Who is suggesting this odd plan to you? Do you have an EPA or LPA for your mum?

xylophone

I take it that you already own a property which is your principal private residence.

Will your mother in effect buy the flat from you at market value? If very recently purchased, presumably there is no question at all of any CGT.

It might be advisable for the flat to be owned as tenants in common with your percentage share being the amount you actually put in?

In such circumstances, there could be no question of deprivation of capital should your mother ever need means tested care/benefits?

Your mother's will would then leave her share of the property to you if this is what she plans and yours would leave your share
to a person of your choosing?


It might be as well for the transfer etc to be handled by a solicitor.

Puggirl

I am not sure what EPA or LPA are.

I already own a house with my other half the reason for mum moving is to be ground level mans much closer to me.

A solicitor is dealing with the transfer if equity but can't advise in tax etc

She isn't buying the flat from me as its in my name already, it will be changed to both our names and her sale money will pay the mortgage off.

noh

Puggirl wrote: »

I am not sure what EPA or LPA are.

I already own a house with my other half the reason for mum moving is to be ground level mans much closer to me.

A solicitor is dealing with the transfer if equity but can't advise in tax etc

She isn't buying the flat from me as its in my name already, it will be changed to both our names and her sale money will pay the mortgage off.

She is buying a share of the flat from you.
Is the amount your mum going to pay more than £125000? If so there will be stamp duty due.

McKneff

You have really muddied the waters.




Look out for 'deprivation of assets'


What happens if you or your mum need care,. and please don't poo the idea, my brother was in care at 49 diagnosed with aggressive alzheimers disease.

booksurr

Puggirl wrote: »

Can anyone advise if there are any tax implications in doing this or anything I should be aware of? I have no siblings and am in her will to inherit her whole estate and this is worth much less than the inheritance tax level currently set.

from the tax perspective your plan is pointless

you already have a home. You will therefore own a second property which will be liable for capital gains tax (on your 50%) when you sell it (presumbly when your mother dies).
If your mother owned the property 100% then you would inherit it on her death and no tax would be payable at all

you do also have to take a gamble on whetehr your mother will need to go into a care home.
whatever % of the property she owns will be used to fund her care home costs.
if you own part of it then your part is ignored because it was paid for using her money (she is going to sell her house and use the money to pay off your moratge on the property she will then be occuping) means that sum will be subject to the deprivation of capital rules since mother has given away her money to you and thus avoided that money being used to fund her care home fees. Therefore mother will be assessed as if she still owned 100% of the property

WillowCat

Well it's not uncommon for a spouse to be added to the deeds of a property, even for no consideration, so the mechanics of doing that exist. The transfer can be done as soon as the mortgage has been repaid. However whether it is wise or not is a different story.

Your share (assumed 50% if named as joint tenants) becomes part of your marital pot should you separate from your wife, which could lead to the forced sale of the flat to distribute that equity.

See above replies for possible deprivation of capital.

Your share, as it's not your PPR, will start to accrue a liability for CGT.

If you ever require means tested benefits you will be refused as the equity will count as your capital.

Cook_County

It is a very odd plan indeed; the fact that you do not know what an LPA is but are planning to meddle in mum's finances is decidedly scary.


Your mum really needs independent legal advice. Suggest to her that she looks for someone via this link: http://www.solicitorsfortheelderly.com/