Gift from parent to buy house

TrevorHampton

My mother wants to live with us & we also want her to join us, but at present our house is too small. My mother is currently selling her home (£800k) and we are currently selling our home (£340k). She wants to gift us £200-£300k once her house is sold so we can buy a bigger house so she can also live with us.
I know the tax implications regarding inheritance tax, but I don't regarding any other like Capital Gains Tax. Need some tax advice on the best way to do this please.

getmore4less

Will you need a mortgage?

[Deleted User]

I am not sure where Capital Gains tax comes into it as nobody seems to be selling anything that is not their main residence.

TrevorHampton

getmore4less wrote: »

Will you need a mortgage?

I currently have a mortgage of £115,000, so I would probably carry that over unless advised against this?

p00hsticks

There is no tax on gifts in the UK.

CGT is not an issue because, purdeyoaten2 points out, all parties appear to selling their main residences.

The only possible tax implication is IHT if your mother were to die within seven years of making the gift and you say you are already aware of these IHT consequences.

xylophone

If you are sure that you all wish to live together, you/wife and your mother sell your existing properties and buy a house outright as tenants-in-common according to the proportions you each contribute?

That way your mother keeps any excess and can save/invest it it to supplement her income.

It would also avoid any suggestion of "deprivation of capital" should she ever need to go into means tested care?

Keep_pedalling

I am not sure how this would affect her estate as far as the primary residence nil rate band is concerned. You are covered in the event of downsizing or moving into care, but she is not doing either of those things, which could lead to a sizeable IHT bill when she dies.

I would loook at her putting more of her equity into the new house, but part gift and part ownership. This should protect her full nil rate bands, and would enable you to do this mortgage free.

getmore4less

TrevorHampton wrote: »

I currently have a mortgage of £115,000, so I would probably carry that over unless advised against this?

Problem is a lender may not like that without you all on the mortgage.


the gift is likely to fall under gift with reservation pre owned asset so might be better just buying a share

Would her estate be subject to IHT today(thinking transferable NRB)

is her estate liable to grow?

Why not have her buy a house and you live with her?

Keep_pedalling

getmore4less wrote: »

Problem is a lender may not like that without you all on the mortgage.


the gift is likely to fall under gift with reservation pre owned asset so might be better just buying a share

Would her estate be subject to IHT today(thinking transferable NRB)

is her estate liable to grow?

Why not have her buy a house and you live with her?

If the gift is given as cash before the purchase of the new house it should not count as a gift with reservation.

kidmugsy

Keep_pedalling wrote: »

If the gift is given as cash before the purchase of the new house it should not count as a gift with reservation.

Could be, but that's incompatible with much of my reading.

Anyway, why ask us? The sums involved are so large that they should be speaking to two suitably qualified solicitors.

getmore4less

Keep_pedalling wrote: »

If the gift is given as cash before the purchase of the new house it should not count as a gift with reservation.

The mother would be stupid to do that as she could end up homeless, she needs to have the condition they buy a house she will live in.

if it does not get caught by GWR would come under pre-owed assets unless there is an exemption they can apply.