Mums house put in my name

dippie66

Hi I’m new to this forum but wondered if anyone could help. My mum wants to sell her home and relocate to where I will be when my divorce goes through. She is very kind and generous and plans to buy a large house that can be split up to create an annex for her and the rest of the house for me and the kids. She wants the house to then be put in my name. We won’t do any of this until my divorce is settled. I will pay her for half of the value of the house and we will share bills etc. Could any one advice on any tax implications or any advice relevant. Many thanks

Alter_ego

Deprivation of assets could be a problem depending on age/ timing etc

lisyloo

It will be a problem if your mum needs long term care on 2 points.
firstly she isn’t actually allowed to give away her house and then expect the taxpayer to fund long term care. That means the transaction could be rolled back and cause issues for you.
also do you want her to be in an awful local authority home? Perhaps some distance from you and other family?

You should absolutely refuse. If you want to rent from her you need to do it at market rates and be able to demonstrate that later if it is questioned. You should be able to get valuations from agents or document current rates for proof of market rate.

It is indeed very generous but fraught with difficulty if she later needs care.

MaryNB

If you haven't already own all or part of a property you will lose your FTB status
If she needs a mortgage to help fund the house her name will have to be on the deeds until the mortgage is cleared.
If she is of the age where she may need to go into a care home in the forseeable future it could be seen as depravation of assets
If she dies within 7 years of giving you the house, inheritance tax may apply on any gifts given over £325k in value.

AdrianC

dippie66 said:

Hi I’m new to this forum but wondered if anyone could help. My mum wants to sell her home and relocate to where I will be when my divorce goes through. She is very kind and generous and plans to buy a large house that can be split up to create an annex for her and the rest of the house for me and the kids. She wants the house to then be put in my name. We won’t do any of this until my divorce is settled. I will pay her for half of the value of the house and we will share bills etc. Could any one advice on any tax implications or any advice relevant. Many thanks

She wants to sell her house, and gift you the proceeds in order to buy yourself a large house for both to live in.

Yes, there are massive implications with her giving such a large amount of money to you.

getmore4less

I will pay her for half of the value of the house and we will share bills  

Why not just both be owners 50:50

Avoids a lot of issues.

deannagone

If the OP can't pay the 50% cost right now due to lack of finances or her currently ongoing divorce, can her mother arrange a private mortgage for her daughter to cover some of the issues mentioned previously?

lookstraightahead

Absolutely deprivation of assets is a problem. 

Why can't you just live there rather than her put it in your name, what is her reasoning for doing such a thing?

Owleyes00

How old is your mum?

Deprivation of assets can apply but it is a different story if your mum is 60 and healthy and not likely to need care any time soon, to if she is 80 and already has some needs.

Not all gifts are deprivation of assets, circumstances matter.

lookstraightahead

Owleyes00 said:

How old is your mum?

Deprivation of assets can apply but it is a different story if your mum is 60 and healthy and not likely to need care any time soon, to if she is 80 and already has some needs.

Not all gifts are deprivation of assets, circumstances matter.

Deprivation of assets is not time specific snd us immaterial of age. I suppose the risk is less, but it is still a risk.

My biggest question is why this is happening? Of what benefit is it to anyone? 

Owleyes00

lookstraightahead said:

Owleyes00 said:

How old is your mum?

Deprivation of assets can apply but it is a different story if your mum is 60 and healthy and not likely to need care any time soon, to if she is 80 and already has some needs.

Not all gifts are deprivation of assets, circumstances matter.

Deprivation of assets is not time specific snd us immaterial of age. I suppose the risk is less, but it is still a risk.

My biggest question is why this is happening? Of what benefit is it to anyone? 

Info from which?

When deciding if deprivation was ‘deliberate’ the local authority might look at the following aspects.

• Motive: when disposing of assets, was the main reason to avoid care charges?
• Timing: there is no set time limit, although local authorities are unlikely to investigate too far back. Most importantly, they will look at the time between the person realising that they needed care and the disposing of assets.
• Amount: was the gift a significant amount that would make a difference to your capital limit? The asset would have to be worth a significant amount for the local authority to pursue this action. Giving away a £300,000 property, for example, would significantly affect your total capital whereas smaller gifts – such as giving a £300 ring to a granddaughter – are unlikely to prompt further investigation.

It all boils down to intention. When you made the gift, could you have reasonably known that you might need care? For example, if you fell ill, were assessed as needing residential care, then signed your property over to a relative the following week, that would look suspiciously like ‘deliberate deprivation’.

Therefore I think the OP would need to think about his specific circumstances as to whether or not this is going to be an issue. It is very difficult to say from the limited information we have about his mum.