Property ownership & inheritance tax query

AJ23_3

My Mum died a few years ago, leaving my Dad the sole occupant of their marital home. He has recently found a new partner and moved into her house.
I have been stuck renting for a number of years as I am alone and cannot afford to purchase a house on just one salary, so we have decided I should move into his vacant house as my permanent residence. This solves several problems as I would cease renting, and it’s closer to work, so savings to be made travelling too. All I would have to do is get a mortgage to pay my sister her half of the current value of the house.
What is the best way to do this, as my name obviously needs to be legally documented somewhere before I can obtain a mortgage; should my Dad ‘gift’ the house to me, or should we just get my name added to the deeds so that he and I effectively co-own it?
I’m trying to find out what’s best not just right now, but in the future too, because my Dad’s in his late 70s, so we’d have to hope he lives another 7 seven years to avoid/minimise the possibility of having to pay inheritance tax if we went down the gifting route.
I’d really appreciate some straightforward advice anyone can offer, as I tried researching this subject but can’t find anything helpful, yet I would have thought this was becoming a fairly common dilemma as so many younger people struggle with property prices now.
My Dad’s partner had to go to a solicitor recently to make will amendments, so asked about this issue while she was there. Alarmingly, she was told we would need to engage a barrister, which doesn’t sound right to me at all. Why would we need a barrister for property ownership changes?

[Deleted User]

How much is your Dad's estate likely to be worth and including the house? How much is the house worth on its own?

xylophone

I am assuming that your parents owned their property as joint tenants and that your father automatically became sole owner on your mother's death.

If your mother did not use her nil rate band in full, then his estate would benefit from the transferable nil rate band and the main residence nil rate band at his death.

https://www.gov.uk/government/publications/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band

However, the proposal seems to be that your father would gift the property now to you and your sister and you would raise a mortgage to buy her out of her interest?

Your father should be aware that if he made a gift as above and then finds he needs residential care, then questions would almost certainly be raised concerning deprivation of assets.

https://www.which.co.uk/later-life-care/financing-care/gifting-assets-and-property/gifting-assets-what-are-the-rules-alp865l0wlum

And what happens if your father's relationship fails - would he move back in with you?

It might be possible for your father to sell you the property on the basis that he acts as your mortgagee - he would take a first charge on the property and you would make repayments of interest and capital monthly as you would with a normal mortgage - he would have to declare the interest to HMRC.

The debt would become an asset of his estate - presumably on his death the benefit of the asset would become yours and your sister's.

At that point your sister could either agree to accept repayments of capital and interest in respect of her share or require you to remortgage so that she could obtain her capital in full.

Your father should consult his own solicitor before entering into any arrangement with you.

The other option is that you pay your father rent for living in his property - your father then becomes your landlord.

See https://www.gov.uk/renting-out-a-property

Keep_pedalling

He should do nothing without taking professional financial advice. Getting this wrong could backfire in so many ways.

Solisitors are not the people to advise on inheritance planning he needs an IFA for that.