Buying part of my parents house to allow them to do some work

Mojisola

DairyQueen wrote: »

What happens if you predecease either parent? Unlikely, but possible. The debt is then called-in as it it is an asset on your estate.

The debt could be written off if the OP predeceases both parents.

kidmugsy

Mojisola wrote: »

The debt could be written off if the OP predeceases both parents.

Wouldn't that mean that the executor was in dereliction of duty?

Mojisola

kidmugsy wrote: »

Wouldn't that mean that the executor was in dereliction of duty?

Not if that was the agreement between the OP and his parents.

AnotherJoe

teddysmum wrote: »

However, as the sale has been made and one person is not able to make legal decisions , the type of tenancy cannot be changed, anyway.

That's incorrect. One party can do it unilaterally simply by serving notice with a letter.

DairyQueen

Mojisola wrote: »

Not if that was the agreement between the OP and his parents.

One of whom suffers from dementia. OP or his mother would presumably be making that decision on his behalf.

What if the OP has dependent children/a spouse and predeceases both parents? Would it be reasonable for the bereaved youngsters to gift a chunk of family assets to OP's parents? - especially at a time when their need would likely be acute? That 'gift' could then be used to pay care home fees or, possibly, be inherited by other siblings.

I realise that this scenario is unlikely but this kind of possibility will be considered by a legal advisor.

Glen_Clark

teddysmum wrote: »

If one goes into care, the house is not counted as an asset of that person, provided that the person left is a spouse, is over 60 or is a dependant. It doesn't even matter if the house is owned by only one of the couple ( I queried that on here some years ago and was referred to a section of Age UK's site.)


The only advantage of being tenants in common is that the person at home could leave their share to a third party, so if they pre-deceased the person in care, the authorities would not be able to have the money.


However, as the sale has been made and one person is not able to make legal decisions , the type of tenancy cannot be changed, anyway.

Said person may continue living in the house whilst the owner is alive.
But I think you will find the Local Authority footing the care home bill can still put a charge on the house and reclaim the care home fees from the estate when the person dies.

Glen_Clark

oldwiring wrote: »

I do wonder, if you did what you propose in your OP, you would become liable to the stamp duty surcharge as owner of two dwellings, on the sale of either.

Lending seems to avoid that possibility.

He wouldn't be the owner of 2 dwellings as he would only own 10% of one of them.
For example a £200,000 house is left between 2 siblings.
One of the siblings buys the house.
He only pays stamp duty on the half he is buying (£100,000 so probably exempt) not the half he has inherited.

oldwiring

Glen_Clark wrote: »

He wouldn't be the owner of 2 dwellings as he would only own 10% of one of them.
For example a £200,000 house is left between 2 siblings.
One of the siblings buys the house.
He only pays stamp duty on the half he is buying (£100,000 so probably exempt) not the half he has inherited.

I cannot disagree, as i don't know, but what about
https://www.zoopla.co.uk/discover/buying/q-a-new-3-stamp-duty-surcharges/ and

Q. Who has to pay it?
A. Anyone who is buying an additional residential property for £40,000 or more. This could mean a holiday home, buy-to-let or even a main residence you plan to live in (more detail on this later).

Even if you already own just a share in another property, it will count so long as the share is worth £40,000 or more.

Properties anywhere in the world are considered too. So, if you own a 30% share of a £300,000 ski chalet in Bulgaria and are buying your first home in the UK, you could be stung with the extra tax.

The higher rates of Stamp Duty Land Tax apply to the purchase of property in England and Northern Ireland also – under separate sets of legislation – in Wales and Scotland too.

This Q&A refers to the rules in England and Northern Ireland which are administered by HMRC. See further down the Q&A for more on Wales.

?

Keep_pedalling

Skimad247 wrote: »

Thanks for the advice! A loan looks like the best option - do there have to be regular payment from my parents to me for it to be officially a loan or could it be a long term loan without payments?

Perhaps one thing I should add is that my Dad has dementia and we are in the process of trying to acquire Power of Attorney but this takes some time. I guess the loan would have to be just with my Mum as my Dad's signature doesn't carry any weight at the moment?

If your father does not have the mental capacity to do that, you have left it far to late to sort a LPA. You should however sort them out for yourselves and your mother.