Purchasing a house using early inheritance money

Beau17

Hey! So a bit of a complicated one (to me anyway!). I currently rent, in receipt of IS, CA, HB and CTB. My landlord has decided to sell and has given me the option to buy the property. I've lived here 13 years and love it. My parents have offered to give me early inheritance in order to buy the property outright, no mortgage, not got to pay them back, it's a gift. 
But here's my question?! 
Obviously I know HB would have to end, but... what about the other benefits? I'm obviously trying to look for work, so I'm able to do things to the house to improve it and maintain it. But I don't want to just take any job, i need to find something that im going to "enjoy" and also needs to be able to work around the responsibility of still providing care. 
I know all the benefits will stop once working, but my question is can the house purchase still go through without affecting the benefits in the mean time? 

Slithery

More importantly, what happens if your parents need to go into care and can't finance it for long enough themselves? The council could make you sell the property to pay for it.

Beau17

My parents are a fair way off going into care 🤞. They have both taken early retirement and draw a monthly income off their investments. The money that they are willing to gift is inheritance that they are receiving from a parent that passed away earlier this year 😔. It will all be above board and every eventuality accounted for

Robin9

Beau17 said:

............. The money that they are willing to gift is inheritance that they are receiving from a parent that passed away earlier this year 😔. ............

In that case they would be better off doing a Deed of Variation so that the bequest passes direct to you.

tacpot12

As far as I know, everything can continue as before with your benefits. You are allowed to own the property you live in.

Slithery is correct; if your parents ever need care and cannot pay for the care they need, if the council end up having to pay for this care, they can seek to recover the money that your parents have given you. They are supposed to have to show that the main reason your parents gave this money was to reduce their assets in order to avoid paying for their care. In this case, I think it is clear that the main reason for giving this money would be to allow you to stay in a property that you like and know, so that you don't have the upheaval of moving.  

Ultimately while the council might be able to force a sale, I would only be concerned about the risk, if your parents are likely to need help from the local authority with their care, whether or not they give you this money. 

Don't forget that as the property owner, you will incur all the costs that the landlord has been paying. You are correct that your HB will stop, so you might even find yourself slightly worse off as you will incur all the costs of property ownership, e.g. buildings insurance, boiler repairs, repairs to the roof and gutter line, redecorating, etc. 

Beau17

Thanks tacpot12. I completely understand what your saying. 
That's why I'm actively seeking employment, so I can actually afford all of the above. 
My parents will be doing a deed of gift. The way they look at it is, they are more than comfortable with what they have, they have a very very good financial advisor. The money that has been left to them is an added extra and they have generously offered to do this for me as, it would be coming to me eventually anyway but also now will have helped me onto the property ladder and watch me benefit from it whilst they are still here. 

greatcrested

Depending on the value of your grand parent's Estate, there may be Inheritance Tax being paid.

Depending on the eventual value of your parents' Estate, there may be Inheritance tax to pay there too.

So as Robin says above, far better for a Deed of Variation to grandparent's will bequeathing the money direct to you, not via your parents.

Of course, if both your parents survive 7 years, then their gift to you would be outside their Estate, but who knows? They might be hit by a bus.

newsgroupmonkey_

There's some awful advice on this thread. I'd go ask a solicitor for the best way to do it.

Age UK say themselves that a council has to prove that the gift was indeed care cost avoidance. If you have a child who is in desperate need of a roof over their head and you can provide the means to do that, I'm struggling to see how any council would justify it.

https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs40_deprivation_of_assets_in_social_care_fcs.pdf

Either way, don't take my advice or anyone else in this thread. The amounts we're talking about and the impact it could have on the whole family, pay for some professional advice.

getmore4less

Robin9 said:

Beau17 said:

............. The money that they are willing to gift is inheritance that they are receiving from a parent that passed away earlier this year 😔. ............

In that case they would be better off doing a Deed of Variation so that the bequest passes direct to you.

If a claim for deprivation was possible(unlikely as pointed out there are other primary reasons for the gift) the DOV does not help as a DOV is still a gift by the original beneficiary.

There potential tax advantages which if they applied would help defend a deprivation claim.  

Pennylane

newsgroupmonkey_ said:

There's some awful advice on this thread. I'd go ask a solicitor for the best way to do it.

Age UK say themselves that a council has to prove that the gift was indeed care cost avoidance. If you have a child who is in desperate need of a roof over their head and you can provide the means to do that, I'm struggling to see how any council would justify it.

https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs40_deprivation_of_assets_in_social_care_fcs.pdf

Either way, don't take my advice or anyone else in this thread. The amounts we're talking about and the impact it could have on the whole family, pay for some professional advice.

The poster says they have a very very good financial advisor. Not sure why they are asking on here then? 

Owain_Moneysaver

Beau17 said:

I know all the benefits will stop once working

Not necessarily - there may be a benefits run-on, or you may be eligible for tax credits or other help. 
There are also limited grants available for some energy-efficiency improvements for householders on benefits or low incomes.