Advice please - looking to buy a house with annexe for retired parents

kingstreet

"The gift would of course be subject to the 7yr inheritance tax rule."
It wouldn't. See the gift with reservation provisions as they would continue to benefit from the gifted funds if they reside in the property.

onwards&upwards

Luckygirl19 said:

onwards&upwards said:

I can't see why you want to do this?  What is the motivation? 
Do you and your parents both really want to give up your privacy and be in each other's pockets potentially for 20 or more years? 

Hi onwards&upwards, thank you for your comment.
The reason for doing this is twofold:
a) to be near our loved ones so we are able to provide care 9as far as we are able) as they progress into old age
b) to enable us to buy a house with them as a home for the longterm future
I believe this kind of scenario is becoming more popular in the UK, especially with multi-age residency... I even believe it is being encouraged byb the government in some cases, to help with the lack of housing and care facilties

What are your thoughts on the parts of my posts you didn’t include in the quote?

Luckygirl19

kingstreet said:

"The gift would of course be subject to the 7yr inheritance tax rule."
It wouldn't. See the gift with reservation provisions as they would continue to benefit from the gifted funds if they reside in the property.

Hi Kingstreet, thank you for your comment - yes, this was how I understood it too. As long as our parents benefit from the "gift", it is by its nature not a gift... and would remain their estate, claimable by LA for future care. Thank you for confirming this!
I want to be very sure that we have considered as many questions as possible for when we have the meeting with out financial advisor, to maximise that time with him - if you can think of any other pitfalls we need to consider, I would be very willing to hear them! Many thanks again.

Luckygirl19

onwards&upwards said:

What are your thoughts on the parts of my posts you didn’t include in the quote?

Hi onwards&upwards - I have taken all of your scenarios into account, they are all very valid. I am trying to balance financial sense with "life" - there will always be unknowns... if we looked at every possible scenario of every possible situation, I am not sure many of us would ever marry of buy a property or take a job... there will always be the "what ifs". I think the padt 5 months have taught us all, globally, that nothing is a certainlty... but i think that's true of life in general. 
So, that said, we are extremely thankful for all and any considerations we should make, but we do know there will be an element of risk... that would still be there even if we choose to buy alone, "what if we split up, what if I lose my job, what is the housing market crashes"...that's true of everything. Please keep challenging me! I need to have all of the "what ifs" at least considered, for us to make a fair and balanced decision... and also for our parents, this has to be right for both parties!
Many thanks for your input, it is genuinely appreciated.

onwards&upwards

Just don’t fall into the trap of causing problems in the future In order to get what you want here and now. 

Multi generation households and care of elderly parents (even without dementia) are a big undertaking.  Not something to take on because you want to get out of rented. 

lincroft1710

Luckygirl19 said:

onwards&upwards said:

I can't see why you want to do this?  What is the motivation? 
Do you and your parents both really want to give up your privacy and be in each other's pockets potentially for 20 or more years? 

 I even believe it is being encouraged byb the government in some cases, to help with the lack of housing and care facilties

If it is encouraged by the government, then it will benefit them more than it will benefit you. Adult social care is extremely costly and although provided by local rather than central govt, local govt receives grants from central govt, so less ASC required less grant needed. The idea of granny annexes or multi generation living is not new, a friend's parents and grandparents all moved into together over 60 yrs ago.

Luckygirl19

Hi all - I just wanted to say a huge thank you to everyone who took the time to comment and give us advice. From your input, we have seriously reconsidered the idea of doing this, and can see now that it isnt in fact the best option (for any of us). We are instead looking to continue with the sale of our parents' home (they physically cant stay there as they have so many stairs), they will buy a 2 bed-cottage with the proceeds, leaving them approx. 120k left over (from the house sale, and in addition to their savings), and we will buy in close proximity but with a kind loan/gift from them of approx 20k (added to our savings of 15k) and with our own 80% LTV mortgage. We know the risks with Inheritance tax, but this is, we believe, the best route for all parties, as we will still be close by to help with providing care as much as is reasonably possible. Thank you all!