Mother's house in joint names?

pauper79

Hello all. Would welcome any advice on this. My mum is in her 70s, house is her only major asset, I am her only child. She wants to leave it to me when she dies (and I have been helping her out with the mortgage for years). If she requires care in later life, the council may force her to sell the house to pay for it. Could we plan ahead for that by putting the house in joint names? My mum suggested it, but I am not sure if it would work and I am concerned about any potential downsides. If I got divorced or went bankrupt, would she be protected? Are there any tax issues like CGT? We might need to go an see a solicitor but thought I would post here first in case anyone has been in the same situation. Thanks.  

TBagpuss

OK,  if it goes into joint names then yes, you would potentially have CGT to pay on your share as it's not your primary home, when the property is sold. 
Unless you paid your mum an open market value for the share in the land then it would be a gift with reservation so wouldn't save any inheritance tax (f that's a consideration)

If you were doing it in order to avoid care home fees then it is likely to be a deprivation of assets, so wouldn't work. (Also, would you not want your mum to be able to use her assets to ensure that she was able to afford a better standard of card in the home of her choice, should it become necessary?)

If you were a joint owner of the house then yes, it would be part of your assets and therefore potentially at risk if you were to become bankrupt or get divorced. It would probably be possible to put in place measures to protect your mum's right of occupancy.

As you have been helping to pay the mortgage it *might* be possible for you to argue that you already have a beneficial interest based on your contributions, and to change the deeds to reflect that, but you would both need to get separate legal advice and you would still have the CGT issue.

MovingForwards

You can, but the council will see through the 'plan' and still potentially take the house into account if she goes into care.
- If she has a nice asset and it's worth a bit, going into care would give you the option of having her in a nice private one and seeing out her days well.

No, she would not be protected if you divorced, went bankrupt etc as the house would be part of your assets.

Assuming you do not live with her, CGT on her death and you selling it.

SDLT on you becoming a half owner, plus the second home increase, assuming you own a home already.

Chandler85

You Mum has worked (most likely) and bought a house and that she now mostly owns (although apparently you pay the mortgage at the moment).  You want to put it in your name as well to stop the council being able to force her to sell it to pay for her care.  Basically you want to make it so everyone else pays a little bit more tax to cover your mums care, so you can get a bigger inheritance.

People in general need to accept, inheritance isn't guaranteed or an entitlement.  Why shouldn't people need to pay for their own care when they have assets?  I get this is a money saving forum, but this is kinda avoiding responsibilities to society as a whole.

getmore4less

IF you are supporting her with mortgage payments you can make those loans, then that protects at least as much as you are putting in. 

pauper79

Thanks for the comments. I think a solicitor would be the way to go. For the record, Chandler85, I am well aware of my responsibilities to society as a whole thanks, of which you know nothing.

youth_leader

Could you both sell your houses, and buy one house with an annexe so your Mum could live independently with you?

tacpot12

pauper79 said:

Thanks for the comments. I think a solicitor would be the way to go. For the record, Chandler85, I am well aware of my responsibilities to society as a whole thanks, of which you know nothing.

And yet you still asked this question.

AdrianC

pauper79 said:

Thanks for the comments. I think a solicitor would be the way to go. For the record, Chandler85, I am well aware of my responsibilities to society as a whole thanks, of which you know nothing.

It really is very simple.

Your mother currently has assets worth £XX0,000 - the value of her house, less the outstanding mortgage.
If she requires residential care, then the local authority will not pay unless and until she only has assets worth roughly £20k or less.

If she disposes of assets, in full or in part, other than in exchange for full open-market value - then she is depriving herself of those assets. If she does that in order to nominally come under the care funding cap, the local authority of the money will refuse to pay her fees.

It is her responsibility to pay her way in life while she can. If she goes into care, she does not need the house any more, and it can be sold to fund her accommodation, food, and care. If you want to keep the house, then buy it off her for market value.

Remember - an inheritance comes from the assets somebody has left at their death. Not some unspecified point potentially years before it. That would be a gift.

The fact it is mortgaged means disposal of it, in whole or in part, requires the lender's agreement - because of their charge against the property - which will require the mortgage repaying. If you want to go for joint ownership, but need to borrow to do so, you will need a joint mortgage.

unforeseen

tacpot12 said:

pauper79 said:

Thanks for the comments. I think a solicitor would be the way to go. For the record, Chandler85, I am well aware of my responsibilities to society as a whole thanks, of which you know nothing.

And yet you still asked this question.

Maybe you ought to have read the last part of the OP's original post. She was aware that there were risks but possibly not all the risks and was seeking clarification before going to a solicitor.  Shooting from the hip is rarely accurate

My mum suggested it, but I am not sure if it would work and I am concerned about any potential downsides. If I got divorced or went bankrupt, would she be protected? Are there any tax issues like CGT? We might need to go an see a solicitor but thought I would post here first in case anyone has been in the same situation

lookstraightahead

If this did all work out for you and there was some legal way of doing this, how would your mum pay for her care if she did need it? With an asset she is likely to have more choice of care. 
Having been through losing 2 in laws recently who were both fit and healthy until into their eighties but then needed care, I was thankful that they had their homes to help fund it.