Renting as power of attorney.

Hoploz

Poet100 relax. You've asked for advice and disputed the replies!

I think there are two things to consider here causing conflict.
1) Providing a home for the young family members
2) Using the house as an asset to generate income for the care home fees.

If the first is your aim then you'd think it would be easier to have an informal arrangement. However, this in itself can lead to problems in future if anything changes ... Eg the sharers fall out, unforeseen financial problems as explained above, you and your sister fall out, the 'tenants' do not treat the place with the care and respect you expect. Even if one wants to move out and this leaves the other sharer responsible for everything. Situations like this can easily end in tears and stress when all you want to do is help and it ends up backfiring.

If the second part is the aim then it would make better financial sense for your father's interests to rent at full market value to strangers and have it as a proper landlord/tenancy agreement situation with all the legal protection taken care of. Probably with a letting agent in between to manage it, as you aren't professional landlords, but rather what is referred to as 'accidental landlords.'

For tax purposes as explained already you'll be fine to complete all the forms as you are acting on your father's behalf and it's a requirement that you do everything anyone would be expected to do for themselves but can't.

Linton

Assuming your father lacks the capacity to make a decision as to what should happen to the house:

If providing a home for the young family members is your aim then I believe it is outside your authority as an attorney. An attorney is not able to take actions for the benefit of anyone except the donor. So I believe that it is justifiable for the house to be sold or rented on the open market. Renting to family members especially for a low rent may be open to question.

jbainbridge

Linton wrote: »

Assuming your father lacks the capacity to make a decision as to what should happen to the house:

If providing a home for the young family members is your aim then I believe it is outside your authority as an attorney. An attorney is not able to take actions for the benefit of anyone except the donor. So I believe that it is justifiable for the house to be sold or rented on the open market. Renting to family members especially for a low rent may be open to question.

Exactly. Given that you have POA your [STRIKE]primary[/STRIKE] only responsibility is the best interests of your father. NOT other family members. By all means rent it to family members - but do it properly. Take a deposit, inventory, tenancy agreement etc.

Poet100

The crisis in social care – looking after elderly, disabled and young people – is a national scandal. Theresa May wants councils to carry this burden. Our priority will always be to look after our fathers wellbeing, if there is a spin off to help others then that would please him, so be it. Meanwhile, Theresa May is planning over the next four years to give away a staggering £7.6billion in corporation tax cuts for big companies. So council tax-payers will have to pay more to fund social care AND subsidise tax cuts for big business. That is a disgrace, and it's this governments priority to hit poorer people twice to protect wealth. Elderly patients are taking up hospital beds because there isn’t enough social care to look after them at home. This government is blaming the previous one, it's spinning the lie that we are all living longer, some of them are blaming immigrants, blaming anyone really bar the fact that they are trying to dismantle the structure of this country and keep ordinary people's wages artificially low. From the young to the elderly they are failing.

We have taken guidelines from citizens advice and age concern, it appears there is no problem as long as we have insurance and safety checks. Thanks for those who posted the more sensible comments.

TBagpuss

As attorney your have a legal duty toact in your father's best interests, so if you do decide that renting out his house is in his best interests, you need to ensure that you are taling allnecessary steps to protect his interests.

I would think that as a minimum that would include:

- Taking, and properly protecting, a deposit
- Considering whether formal guarantees are requiredon beahlf of any tenants who are not in full time work
- Ensuring thatthe property has a gas safety certificate etc to make sure you/ your father are complyignwith the law
- doing a proper check-in inventory
- Making sure that there is appropriate landlord's insurance in place, and that there is also suitable contents insurance in place if the property is furnishd.
- Have a proper, written, tenancy agreement and make sure that all concerned (and their parents, if necessary) are aware that this is not a 'family' arrangments but that you as Dad's attorney must act solely for his benefit which means that you canot be more lenient to the family tenants than you would be to others.

I think you do need to consider whether it is in your dad's interests to keep the property and to rent it out or whether it would be better to arrange for it's sale now.

I think if youare thinkingof renting it to the family members for less than an open market rent then you need to be cautius, and I's suggest taking professional advice first. It might be allowable if the alternative s that the property would be standing empty, if there are good reasons not to sell it now, but if the alternative would be to rent to non-family, or to sell, then either of those is likely to be a better option for your dad.

rnting it out ay also have longer term tax implicationsas it would not longer be your dad's principal residence so there might also be CGT or other tax implications when the hosue does eventually come to be sold, so again, getting some proper professinal advice before going ahead would be sensible.

If you do go ahead, then you will need to complete a tax return on your dad's behalf, and sumbit it as his attonrney

Pixie5740

Poet100 wrote: »

The property is mortgage free, being teenagers is irrelevant (one is early 20s) and renting to family or strangers is also irrelevant, I would say there is more stability in renting to trusted family members, who we know, will not fail on keeping up payments and will look after the property, trusted so much that we would waiver the deposit.

:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

I don't know why you bothered posting on the forum since you seem to know it all already.

Cakeguts

https://www.gov.uk/lasting-power-attorney-duties/overview You seem to think that having power or attorney over your father's finances gives you the right to do with them whatever you want to do It doesn't. You have to do what is in the interest of your father. Not what you think your father would want to do if he could you have to do what is legally in the best interest of your father when you are managing his finances.

For the best interests of your father's finances without any reference to what you think he would like but what you are legally entitled to do is to rent out his home on a totally commercial basis. You are not entitled to offer reduced rents to family members because you are not entitled to give away money that is legally his. If you rent this property at less than the commercial rate you are depriving your father of some his assets that he is legally entitled to. Offering a discounted non commercial rent is the same as giving your relatives some of his money. You are not legally entitled to do that.

If you do not offer this property at a commercial rent and evict tenants for non payment of rent and someone complains a court can take the power of attorney away from you.

You seem to think that having power of attorney gives you the right to use your father's property for any reason that you want. It doesn't. You have got to stick to the legal rules of power of attorney.

If you continue to do what you seem to be intending to do especially since you say only one of the tenants has a job and that is part time then you are not acting in the way that power of attorney says you must act. The fact that your father's care can be covered by other money does not give you the right to deprive him of income from his house.

Hoploz

Pixie5740 wrote: »

:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

I don't know why you bothered posting on the forum since you seem to know it all already.

In fairness the actual question asked was how to go about the tax returns.

molerat

Hoploz wrote: »

In fairness the actual question asked was how to go about the tax returns.

Which actually seems to be the least of their problems

Poet100

Wrong, we have taken legal advice now, There is no problem with us renting our fathers property out as attorneys or to family members at all. Apparently it is common practice and a sensible approach to a National disgrace.
Just to reiterate Hoploz, the question really is about the tax returns.