Council tax while living rent free from family

emg26

Hi

My great grandma owns her own house and has now moved into a nursing home for care. Her 2 daughters (my grandma and great aunt) have power of attorney and are looking after all her finances. They have agreed to let me and my partner live in my great grandmas house rent free as we save some money to buy our own.

The agreement is that we pay all the utilities, council tax etc. However, when applying for council tax it asks for either the solicitor if you own the home or the name of the landlord if renting. As we are not paying rent I don't know if we are technically renting. I also don't want to give my great grandmas name as I don't want to implicate her in anything such as extra taxes etc. Does anyone have any advice on how this needs to work or any more problems we may run into?

Thanks

elsien

The powers of attorney should be acting in the best interests of your great grandmother. It is hard to see how you having the house rent free is achieving that. Does she or will she not in the future need the money towards her care bills?

Unless the LPA states otherwise this would count as a gift or donation and should be checked via an application to the court of protection. The attorneys could potentially be on dodgy grounds and should read OPG2 guidance on giving gifts.

theartfullodger

emg26 wrote: »

Hi

My great grandma owns her own house and has now moved into a nursing home for care. Her 2 daughters (my grandma and great aunt) have power of attorney and are looking after all her finances. ...

Good, so they'll want to ensure the best income from her assets... ..........

....They have agreed to let me and my partner live in my great grandmas house rent free as we save some money to buy our own...............

errr.. would it perhaps be more in line with normal British values to pay great-grandma market rate rent??

Just a thought/question: No suggestion as to what the correct answer might be.


Who or what supervises those holding PoA to ensure they behave as they should? Anyone know?

emg26

She has enough money saved to pay for her care for a good number of years. Also we are refurbishing/doing up the house putting a lot of money into it to add value so they can sell when ready in a couple of years.

foxy-stoat

Whether you pay rent or not your Landlord is your Great Grandma.

You really should pay some sort of rent even ifs a few hundred pounds.

AdrianC

How much council tax is payable from your GGM's money by the attorneys if the house is rented out commercially? £0
How much would be payable by them if you + partner live there and don't pay it yourselves? Full rate.

Seems fair to pay that difference, don't you think? Even if you don't feel any moral obligation towards your GGM subsidising the rest of your living expenses.

emg26

Does anyone know if I do pay rent to my great grandma, will this mean extra tax or any implications for her/her money?

McKneff

Who is paying for great grandmas care.

Those who have power if attorney are not carrying out their legal duties correctly.
Not sure that they can be held legally responsible for that.

And of course morally, you should be paying rent.

foxy-stoat

emg26 wrote: »

She has enough money saved to pay for her care for a good number of years. Also we are refurbishing/doing up the house putting a lot of money into it to add value so they can sell when ready in a couple of years.

Define a lot, as spending £10K on a kitchen, £2K on a bathroom and £200 for a few tins of paint wont make it worth any more and you wont be saving much money will you.

Probably better to sell it now and not waste money on it.

BrassicWoman

hold up

Is great grandma still capable of making her own decisions, and has made this one?

AdrianC

BrassicWoman wrote: »

hold up

Is great grandma still capable of making her own decisions, and has made this one?

Doesn't matter - the attorneys can make it on her behalf, whether she has capacity or not.

They have to act in her "best interests", and make the same decision as they believe she would if she had capacity. That doesn't necessarily mean the absolute cheapest/best income. But there may well be tax/deprivation issues around a substantial gift like rent-free-living.