Being charged for care - please help

Mark_b_2

Now I have kind of got my head around my dads issue, im trying to help my mum. We are wondering how it is best to tranfer the money of her house to me? i.e. best way to avoid inhertance tax? Which forum section should I ask this under? Thanks again

EdInvestor

Mark_b wrote: »

Now I have kind of got my head around my dads issue, im trying to help my mum. We are wondering how it is best to tranfer the money of her house to me? i.e. best way to avoid inhertance tax? Which forum section should I ask this under? Thanks again

First of all, inheritance tax only applies if her estate is worth over 300k.Secondly,if her house is worth over 300k, giving it you while she remains living in it, will not take it out of her estate for IHT - it's called a 'gift with reservation of benefit - she would still be charged.The Revenue has seen it all before...:rolleyes:

In addition is she did give it to you and then lived for 20 years, when you later sold the house after her death, you would be hit with a big bill for capital gains tax.

Whereas if she gave it you to avoid paying for care costs, this would be called "Voluntary deprivation of Assets" and they would still force you to pay.There are some ways around these problems, but they really don't affect most people anyway.

Savvy_Sue

Ohtoobedebtfree wrote: »

Your dad can give £250 away tax free as a 'gift' to any one person a year and to any number of people so he could give you and you and your grandparents £750 (not alot but it helps).

I know that's the case with reducing a potential [STRIKE]income[/STRIKE] INHERITANCE tax liability, BUT does it also apply in this case? It may do, I just don't know ...

Please note I've edited this post a few days after first putting it up, apologies if anyone was confused or misled by it!

And actually isn't it the case that for IHT planning you can give up to £3000 a year, plus any number of individual gifts of £250? Which it looks as if you meant to say.

It is important to keep the two things separate.

Mark_b_2

Her Estate is over 300k. Nothing to do with any care issues. How would it be best to get the money to me with minimum losses?

Savvy_Sue

Is your mum not capable of investigating and dealing with this herself? And I'm also thinking of your brother's needs. You seem to have enough on your plate, and while I can see your mum might ask you for advice, she really needs to get that advice for herself and decide for herself what to do with her assets.

Certainly she can start giving you unlimited amounts of cash now with no issues that I'm aware of, as long as she doesn't die within the next 7 years. But she might not want to do that, however much she loves you!

Mark_b_2

I think you may have seen my posts in a very bad light:rolleyes:. As i said first off....

Mark_b wrote: »

We are wondering how it is best to transfer the money of her house to me?

Me and my mum have been discussing this issue for over a year now and we have been wanting to go see a professional for advice, but lack of money and time has meant we haven’t. With me finding this helpful forum I thought I should ask.

My mum got the house from the divorce, but the costs of living here well out way her pay. She can’t really handle a full time job, so just works part time and scrapes by. My brother is in full time care, so giving any money to him would be taken away to fund his care, she has talked about giving it to me, as long as an official agreement is made that he can have his share when ever he needs something (hehe … he loves his technology so is always wanting the latest gadgets). She was thinking of selling up, buying a nice small house, and then trying to work out how to give me the left over money?

I hope this has explained it better. I can see re-reading my posts that some people might look at it the way you did, so I apologise for not explaining better. So no, my mum is not capable of investigating and dealing with this herself and no, I don’t want her money, to put it bluntly.;)

noh

Mark_b wrote: »

.................
So no, my mum is not capable of investigating and dealing with this herself and no, I don’t want her money, to put it bluntly.;)

So the best way you can help her is to arrange for her to receive some professional advice before she takes any action that she or you may come to regret.

Nigel

Errata

Mark, your mum's estate is substantial and there's certainly enough for her to sell up and buy a smaller place, perhaps something especially for the over 55's. This would give her a property she owns and some cash to generate interest for day to day living needs.
However...............given the care needs of your brother and the necessity for your mum of making a properly worded will, my advice would be to seek the help of an Indenpendent Financial Advisor. I like to think I'm pretty savvy when it comes to financial planning, but I've used an IFA and found the service cost effective and sound. HTH

Savvy_Sue

I know you've said your mum isn't in the best of mental health, but the other thing to consider - which she might not be able to see for the stress of thinking about moving - is that if she had fewer money worries and wasn't in the former marital home, she might feel 'released', happier, and better able to cope with life in general.

It's an idea anyway. But I can only echo what Errata says, she really needs the services of an IFA. It won't be quick, and if it's thorough it may not be easy, but it should be worth every penny in the long run!

EdInvestor

Mark_b wrote: »

My mum got the house from the divorce, but the costs of living here well out way her pay. She can’t really handle a full time job, so just works part time and scrapes by. She was thinking of selling up, buying a nice small house, and then trying to work out how to give me the left over money?

Certainly the way to go.She can buy a smaller home which is cheaper to run and invest the leftover money to provide an income so she doesn't have to "just scrape by".

She should start a programme of giving gifts ever year. The amounts will make a difference to you - but not eat into her income too much and as long as she survives for 7 years there will be no IHT to pay.

It would not be sensible for her to give away a large amount of her investment money if she is only in her 50s, as she may well live for a further 30 or 40 years. However there are ways to shelter it from any IHT while still providing her with an income, so that's all right.

See an independent financial advisor (not the man at her bank!)