Inheriting a house

Jimmy211

Hi all,
I am not sure whether or not I am in the right section but I would like some advice on inheritance. My Mother owns a house which, when she passes on will become mine. She was taking about putting it in my name in case that she ever needs care and the authorities take it out of the worth of the house.
Which is the best way to proceed with this? Another option I was thinking of would be to buy the house at a cheap price and then she will have money in her retirement. The problem is I don't have a cash deposit.I do own a house of my own, I don't know whether this could be used as a deposit.
Thanks in advance for any advice.

thriftylass

Jimmy211 wrote: »

My Mother owns a house which, when she passes on will become mine. She was taking about putting it in my name in case that she ever needs care and the authorities take it out of the worth of the house.
Which is the best way to proceed with this? Another option I was thinking of would be to buy the house at a cheap price and then she will have money in her retirement.

The first would be deprivation of assets (google it). If she only wants state care it won't be taken form the house, if she wants decent care it will be taken from the house as that is her asset to pay for it.

If you buy the house, where would she live. If she remains in the house that has implications too.

There are plenty of threads on her dealing with similar situations.
Ideally, if you want good care in age, you use your own assets to pay for them, i.e. your house.

Comms69

It's not a good idea - she would be treated as if she still owned it - google deprivation of assets.

G_M

1) 'deprivation of assets' ie deliberately getting rid of assets in order to qualify for benefits

2) where will she live after giving you the property?

a) if she stays in the property it would be a 'gift with reservation' so still treated as part of her Estate for Inheritance Tax

b) if she moves out, where to?


You/she are not the first to think of this - thousands do! And neither local authorities nor HMRC are stupid!

PhilE

You have to consider inheritance tax. If the property is over a certain amount, you would have to pay to keep it or sell it in order to pay the tax.

The way around it, is that she gifts you the house. If she then remains in the house, she must pay market rent. Not a cheap rate of rent. Otherwise, the taxman wont view the gift as a gift, and tax you.

She must also remain alive for another 7 years, the tax rate goes down the closer to 7 years it is.

Doubt this would help her get more care though.

lisyloo

Also bear in mind that many care homes within local authority budget aren’t the places you’d want your mother to be cared for.
Most people don’t stay in care homes for very long, she can get care at home before that which is means tested on her income only and won’t include the home. So let her be well cared for somewhere nice and take the rest knowing you did the best for your mum.

AdrianC

Why should the council tax payers of her area subsidise your inheritance?


That's what'll be happening if she deliberately gives away her assets to qualify for council-paid care...


She has the money to pay for her care if she needs it. She may need to sell the house, but she won't be living in it any more, so it'll not be a problem. Get her to give you power of attorney, though, so that you can deal with any paperwork on her behalf. You then inherit what's left of her money when she does die.

supa34

She can gift you the property but has to live 7 years to avoid inheritance tax.

If she gifts you the property she has to pay you rent on it so set up a direct debit to pay you the rent. Again you can look after her affairs and pay her bills, shopping etc if you get what I mean.

Lastly she doesn't have to go a care home. Be a son and look after her till the end.

Mojisola

supa34 wrote: »

Lastly she doesn't have to go a care home. Be a son and look after her till the end.

Most people don't end their lives in a care home but, for some, it's the best place - it's not always possible to give someone the care they need at home unless you have enough money to employ 24/7 carers.

SandraX

Dear OP

The IHT tax seven-year rule has been made clear here.

Someone we know, the parents sold the house to their sone at bottom market value, ie about 400k, they 400k went on holidays and buying a new 60k car in their name but son and family used and the parents paid the insurance, maintenance/etc and had a second car for their own use - so sone saved thousands in real money as not having to buy car, they paid for a25k orangery at sons but invoice as to show work was their address, and when on hols they pay for all the food/drinks etc and within 5 years spend a good 200k - so there are ways around it, and nearly forgot, they have also bought several diamond rings for many thousands and said they had lost them made a legal note of this but no insurance claims as not insured show that is another 50k inc in the 200k. The son also took cort action for an injury sustained recently at parents home, as no insurance on property or accident/liabity, so was awarded 7k for the slip. This is hearsay, so they could be pulling my leg, but it got me thinks.

G_M

SandraX wrote: »

....... This is hearsay, so they could be pulling my leg, but it got me thinks.

Your post got me thinks too.