Moving my mum into a retirement home

SpartaBantam

X-POSTED

My Mum has bravely decided that she is going to move out of the family home (her only home for the last 70+ years) and into a retirement home.

She was supposed to be moving house this week, but her buyers are having a number of issues around dates/money/whatever.

To try and make the situation easier and de-couple the purchase and sale a little, I've been wondering whether I could 'loan' her the money (lets say £50k) she needs in order to purchase the retirement flat, so she isn't dependent on the sale of her own house in order to buy.

What do I need to be aware of, and how can I protect us both from any tax implications?

MTIA

lisyloo

You need to consider scenarios such as her dying or you dying during this period.

Honestly I’d say either stay in a chain like most people do or alternately let her get an expensive bridging if the desire for convenience warrants it.

Why can’t she just stay in the chain?

hazyjo

Don't forget the additional stamp duty.


Also, that retirement place will be extremely hard to sell in the future. Know it's near exchange, but please please please read that lease yourselves really carefully (not just her solicitor) and make sure you're happy with it.


My mum's friend's buying one and there are all sorts of clauses in it such as no overnight guests under the age of 'X' (something like 50, can't remember), and can't hang pictures on walls, definitely no pets (common with flats anyway), etc. I'm sure most ignore the odd rule-break, but all you need is one busybody and yer screwed. Hopefully it has a long lease.


Would also stay in the chain.

SpartaBantam

Chain is only her buyer (FTB) and her. She's on her own and getting very stressed out by the whole thing, and every delay is causing her issues.

The latest cockup from the buyer has left her without a phone and broadband, as we had already arranged to move them to the new property (Talktalk have a 10 day turnaround on house moves. They have actually done something right and on time for once in disconnectign everything from her current property. Unfortunately it will now take 10 days to reset to this property, and ten days to move back again, and they wont let the jobs overlap). Bizarrely, the house insurance call took longer than the Talktalk once, and got her even more annoyed. So my primary reason for the move is for her health.

I've read the lease and she knows people who are already in there.

Obviously, I'm hoping she won't die in this period! I'm confused why an expensive bridging loan is preferably to me lending her the money myself?

SpartaBantam

hazyjo wrote: »

Don't forget the additional stamp duty.

Where has the additional stamp duty come from?

getmore4less

IF no other borrowing is needed.

There is no tax on loans, potential income tax on interest if charged.

The terms of the loan,determine when it gets paid back eg. when the house is sold.

Worst case scenario would be the buyers pull out and/or she dies before a sale is completed, there are then further delays you don't get your money back for longer than first expected.

Is she the only owner?
Is there a LPA in place.
Who is the executor of her will?

xylophone

Has exchange of contracts taken place?

SpartaBantam

Thanks

getmore4less wrote: »

IF no other borrowing is needed.

Is she the only owner?
Is there a LPA in place.
Who is the executor of her will?

No other borrowing required
She is the sole owner
LPAs in place but not activated - authority between me and my elder brother.
Executor is my brother.

Mutton_Geoff

SpartaBantam wrote: »

Where has the additional stamp duty come from?

Stamp Duty on second homes = 3% on top of standard rate.


https://www.moneyadviceservice.org.uk/en/articles/everything-you-need-to-know-about-stamp-duty

SpartaBantam

Mutton_Geoff wrote: »

Stamp Duty on second homes = 3% on top of standard rate.


https://www.moneyadviceservice.org.uk/en/articles/everything-you-need-to-know-about-stamp-duty

Surely this only applies if I buy the home with my Mum - not if I just lend her the money?

hazyjo

SpartaBantam wrote: »

Surely this only applies if I buy the home with my Mum - not if I just lend her the money?

Okay, it's not clear at the moment who lives with who and who owns what.


If your mum's name is on the deeds of the house she lives in and she buys another without selling it, she will be hit with 3% stamp duty. AFAIK, she should be able to claim it back later. (I am sketchy on stamp duty so look for an online calculator.)