help to review my mum's inherited pension

atush

Basically, the value of her house SHOULD be used to provide her the best care if she needs it. Not to 'secure' it for you.

and it isn't allowed to sign 50% over to you. AS that would be deprivation of assets, and in any case would cost you a bomb in CGT anyway should the price rise.

Your solicitor sounds like a crackpot?

rosyposyjm

So Is it best to leave the house in her name?

(I know it may come across as me being greedy, trying to secure things for me, but I'm only enquiring on behalf of my mum and her wishes, which are that ultimately her grand children are well provided for. )

By April 2020, am I right in believing there will be a cap on an individual's money spent on care so that really, it won't matter anyway? We just want to ensure (if it's possible) that all my dad's hard work isn't eaten up by hefty health care bills.

The financial advisor said it wouldn't be depreciation of assets as we're assuming that my mum will be v healthy for a long time to come. .. Hopefully not become ill at all in fact.

Basically my mum is trusting me to find the best way forward so that she can secure a financially sound future for my kids. Any suggestions?

rosyposyjm

Would capital gains tax be paid on the price increase of the property from the date it was signed over our from the date that my mum originally bought it (as there'd be a big difference).

atush

First of all, your mum is fit and healthy and only in her 60's. So the chances are, she will not need care in a home. As most people DONT need care in a home. Your FA is correct in that if she is fit and healthy that is the time to move assets, but you want to move cash rather than a home due to CGT issues. He should know this hence I am wary of his suitability.

Second, the time for worrying abt grandchildren etc should have been when your dad died, not now. AS she could have passed on some of her assets to them then, free of IHT using his IHT threshold.

In any case, if the home is the main asset there is a new proposal to raise IHT to cover a home to be passed on to direct decendents.

atush

rosyposyjm wrote: »

Would capital gains tax be paid on the price increase of the property from the date it was signed over our from the date that my mum originally bought it (as there'd be a big difference).

from the date signed over I believe. But that could be a long time and could be big?

atush

She needs to give cash and other non main home assets to them/you now to ensure their inheritance.

But why them and not you? After all, hey will inherit from you? is she worried about your marriage? If so things should be left directly to the children.

rosyposyjm

No - she's not worried about my marraige. I am comfortable financially and quite happy. My mum is a terrible worrier and I want to help her make the right decisions. On the advice of the FA today, she has now made an appt next week with a solicitor to sign half the house over. I'm now thinking we should cancel this. Or can we ask the solicitor for advice? Or maybe see a diff FA - one who isn't directly involved in her pension?

atush

See a different adviser, and cancel seeing the solicitor. giving them part of the house would be problematic as they are children and they cant own property, and giving it to you will waste some of the value on CGT that you would have to pay later. If she wants to give assets now, they should be cash or shares instead.

Why not have her write a will giving the children a % of her assets and not go thru you?

You have to explain to her the IHT rule on houses, and to explain that you would pay CGT on the house if you won it now. But you would not owe it later if you inherited it (unless you keep it and rent it out).

IMHO the FA should know all this and in advising this course I feel he is unsuitable so find another. Go to unbiased.co.uk

kidmugsy

If you own half the house and then get into financial trouble, boom! Your mother could be obliged to sell the house and hand over half the value to your creditors. When my FIL made a similar suggestion to me I told him to do no such thing, and instead go to a solicitor to make a proper, sensible will. I even outlined what the will might say, emphasising that his wishes, and his solicitor's advice, should trump my scribbles.

dunstonh

Can you clarify if the half the house is being signed over to you or whether it is a form of trust that is being used?