Ownership of house

carlbhoy

Hi all, can anyone advise, my mother of 84 years is selling the family home of 60 years to move to a bungalow, She has recently allowed a male friend, who is seven years younger than herself to move in, mum is buying the bungalow with the proceeds of the sale of the house, and this guy is going to move in completely, now the house, where mum is now, is jointly in her name and my 2 sisters and me.
With mum selling the house she will also have a lot of spare cash, the guy seems genuine enough, and says he will not want anything but can anyone suggest any precautionary steps to take, to ensure, everything will be ours, which mum says it will be, when the day arrives, when mum is no longer with us,

Flugelhorn

I think you need to chat to mum about what her wishes really are - if she dies before the friend will she be expecting friend to be able to stay in the property, if so for how long?

have you got a POA for mum? might be worth discussing as she is in the process of doing various legals

p00hsticks

carlbhoy wrote: »

the house, where mum is now, is jointly in her name and my 2 sisters and me.

Bear in mind that if you and your sisters are not currently living in the property the sale may mean that you have some capital gains tax to pay ?


Are the proceeds of the sale gonig to be split between you, your sisters and your mum - it sounds like you are letting your mother keep all ofi it ?

carlbhoy

Thanks for your replies, yes I am currently named as POA and yes mum, will be keeping all of the money, half of the house was put in mine and my sisters name in case either of my parents went into care, so they could not get either parent to sell the home to subsidise care home costs if needed.
Mum has said she would wish her partner to remain in the house as long as he's alive, but to be quite honest, all us siblings are in our 60's, so he could even outlive us, and we could even need financial help in the future

macman

Unless she has been paying you and your sister a commercial level of rent for the 50% of the property she does not own, then for IHT purposes that half of the property value will be seen as a gift with reservation, and so form part of her estate regardless.

zagubov

If you're in England, it might be useful to read this document.

As macman says, if she's paid no rent to you and you haven't done the safety checks of a normal landlord, your ownership of a share of it will look contrived.

If your mum paid for all the house, you paid nothing, and don't live there, and she has to go into care, then the house isn't protected from sale by the council.

More knowledgable posters should be along soon to give more specific advice.

Got to say, I wouldn't like to be in your mum's partner's position; I'm not sure what security he has for the future.

da_rule

carlbhoy wrote: »

Thanks for your replies, yes I am currently named as POA and yes mum, will be keeping all of the money, half of the house was put in mine and my sisters name in case either of my parents went into care, so they could not get either parent to sell the home to subsidise care home costs if needed.
Mum has said she would wish her partner to remain in the house as long as he's alive, but to be quite honest, all us siblings are in our 60's, so he could even outlive us, and we could even need financial help in the future

Are you gifting your part of the proceeds of the sale to your mum then, or will you still be named on the deeds for the new property? If you are gifting the money, this may have implications for inheritance tax. If you are going to be named on the title for the new property then the transaction may be subject to the higher rate of stamp duty.

As has been mentioned, even if you gift the money there may be capital gains tax payable on your share.

I also assume that the earlier transfer, to avoid care home fees, was done without professional advice as this would not be effective. If you transfer an asset to avoid care fees then this is a deprivation of assets and the local authority will carry out a means test on the basis that the transfer had not taken place.

HampshireH

By putting half the property into your names it safeguarded an inheritance of some description.

By giving up half the home and your mum buying on her own not only do you lose your asset buy she may also have to sell in the future to pay for care fees.

Back to square one. If she grants her new partner a lifelong imterest to live there, as you say he could outlive you all.

What does he bring financially to their relationship. Does he own a property elsewhere? Does he have adult kids who could make this messy later on when they deman their dad gets the house etc (speculation of course but its not uncommon)

AnotherJoe

carlbhoy wrote: »

Thanks for your replies, yes I am currently named as POA and yes mum, will be keeping all of the money, half of the house was put in mine and my sisters name in case either of my parents went into care, so they could not get either parent to sell the home to subsidise care home costs if needed.
But they dont do that as long as they are over 60 and once one had died then unless you were living there and aged over 60 they could get their hands on the others half. As they could now unless mums partner/friend has a financial say in it or they get married.

Mum has said she would wish her partner to remain in the house as long as he's alive, but to be quite honest, all us siblings are in our 60's, so he could even outlive us, and we could even need financial help in the future

Yet another mess caused by ineffectual amateur tax avoidance.
The only way to prevent this would be to not give mum your half of the money from the sale so she doesn't own the whole new house, the old one is only half hers after all. Then you can jointly kick the guy out when mum dies. Will need court action if he wont go. And if she goes into care the whole house could go on fees anyway.

zagubov

Is the partner making any contribution to the structural maintenance of the house?

I think there are ways a resident partner can gain a beneficial interest in the house. Best to be clear about this.

cr1mson

Maybe just me but find it amusing that someone who wants to ensure that everything is ours is concerned about gold digging! Ultimately it is your Mum's money to do as she wants especially as your share of the house seems contrived rather than a reflection of any money you put into it. So perhaps she will spend all the cash on wonderful holidays with her new friend or she will need it for care home fees who knows!?