Helping parent buy a house

racheypache

hello
my mother in law is wanting to sell her flat and buy a house. She needs a bit more to stay in our area and my husband and his brother are considering contributing. She wouldn’t have a mortgage. 

My question is if she needs to go in a Care home later in life would the money we contribute be used for that too or would that still be ‘ours’? 

Is there a better way to do this? 

Thanks

xylophone

Your husband and his brother should lend their mother the money and take a first charge against the property.

This can be discussed with the solicitor dealing with the purchase.

They could choose to charge her interest  - they would need to report to HMRC.

They could choose rolled up interest repayable on the sale pf the property - this would be reported to HMRC in the  year of receipt and taxable in that year.

They could choose to receive a portion of the value of the property - taxable as CGT.

Should the property need to be sold for care, the loan would need to be repaid before the proceeds could be used for other purposes.