Parent moving in, contributing to cost of house, but don't want on mortgage, is there a way?

familywarrior

Hey all, I'm a bit overwhelmed with all the amazing advice! Thank you so so much, going to give it all a good read and investigate further! But from what I can gather from your collective responses is:

• Get married, we have a son etc, it's just been a priority thing (ha ha)
• Look for 2 properties in the same area (very close)
• Parent buys own new small property
• Parent gifts us remaining money from sale of her house to buy our own home, hopefully with her living 7+ years to remove issues with inheritance tax
• Make sure all siblings are aware of plans/ideas

I know this sounds very basic, but would that be the general thinking from all the brains here?
(God you lot know our stuff!)

Keep_pedalling

familywarrior said:

Hey all, I'm a bit overwhelmed with all the amazing advice! Thank you so so much, going to give it all a good read and investigate further! But from what I can gather from your collective responses is:

• Get married, we have a son etc, it's just been a priority thing (ha ha)
• Look for 2 properties in the same area (very close)
• Parent buys own new small property
• Parent gifts us remaining money from sale of her house to buy our own home, hopefully with her living 7+ years to remove issues with inheritance tax
• Make sure all siblings are aware of plans/ideas

I know this sounds very basic, but would that be the general thinking from all the brains here?
(God you lot know our stuff!)

The 4th option would be a very foolish option for her unless she has substantial other assets to fall back on if it all went wrong. She would basically be risking her long term security. What happens to her if you had to sell up because for of financial difficulty or divorce? What happens to her if you die before her?

The LA would almost certainly treat it as deliberate deprivation of assets. As for IHT the 7 year rule does not apply where she still benefits from the gift. 

simon_or

Keep_pedalling said:

familywarrior said:

Hey all, I'm a bit overwhelmed with all the amazing advice! Thank you so so much, going to give it all a good read and investigate further! But from what I can gather from your collective responses is:

• Get married, we have a son etc, it's just been a priority thing (ha ha)
• Look for 2 properties in the same area (very close)
• Parent buys own new small property
• Parent gifts us remaining money from sale of her house to buy our own home, hopefully with her living 7+ years to remove issues with inheritance tax
• Make sure all siblings are aware of plans/ideas

I know this sounds very basic, but would that be the general thinking from all the brains here?
(God you lot know our stuff!)

The 4th option would be a very foolish option for her unless she has substantial other assets to fall back on if it all went wrong. She would basically be risking her long term security. What happens to her if you had to sell up because for of financial difficulty or divorce? What happens to her if you die before her?

The LA would almost certainly treat it as deliberate deprivation of assets. As for IHT the 7 year rule does not apply where she still benefits from the gift. 

Sorry that's just incorrect.

Doa - needs intention and an expectation that long term care will be needed (just being 82 doesn't mean one will go into care) at the point of making the gift. The LA can't just willy nilly decide, there's guidance they need to follow. There's nothing in the OP's post to indicate that this would be seen as doa.

IHT - The OP has said "Parent gifts us remaining money from sale of her house to buy our own home" How is the mum benefiting from the gift if she's bought her own house and the gift to the son is for them to buy their own house which she will neither live in not have an interest in.

Keep_pedalling

simon_or said:

Keep_pedalling said:

familywarrior said:

Hey all, I'm a bit overwhelmed with all the amazing advice! Thank you so so much, going to give it all a good read and investigate further! But from what I can gather from your collective responses is:

• Get married, we have a son etc, it's just been a priority thing (ha ha)
• Look for 2 properties in the same area (very close)
• Parent buys own new small property
• Parent gifts us remaining money from sale of her house to buy our own home, hopefully with her living 7+ years to remove issues with inheritance tax
• Make sure all siblings are aware of plans/ideas

I know this sounds very basic, but would that be the general thinking from all the brains here?
(God you lot know our stuff!)

The 4th option would be a very foolish option for her unless she has substantial other assets to fall back on if it all went wrong. She would basically be risking her long term security. What happens to her if you had to sell up because for of financial difficulty or divorce? What happens to her if you die before her?

The LA would almost certainly treat it as deliberate deprivation of assets. As for IHT the 7 year rule does not apply where she still benefits from the gift. 

Sorry that's just incorrect.

Doa - needs intention and an expectation that long term care will be needed (just being 82 doesn't mean one will go into care) at the point of making the gift. The LA can't just willy nilly decide, there's guidance they need to follow. There's nothing in the OP's post to indicate that this would be seen as doa.

IHT - The OP has said "Parent gifts us remaining money from sale of her house to buy our own home" How is the mum benefiting from the gift if she's bought her own house and the gift to the son is for them to buy their own house which she will neither live in not have an interest in.

Unless I read the opening post incorrectly if they went down this route she should be moving into the same property so yes she will still have an interest in it.

Even if DoA was avoided she will have lost ability to self fund risking an ‘over my dead body grove’ care home. Hopefully this will never be needed and living close to family does lower the risk. The other major issue is a major family rift with the siblings loosing their inheritance. 

simon_or

Keep_pedalling said:

simon_or said:

Keep_pedalling said:

familywarrior said:

Hey all, I'm a bit overwhelmed with all the amazing advice! Thank you so so much, going to give it all a good read and investigate further! But from what I can gather from your collective responses is:

• Get married, we have a son etc, it's just been a priority thing (ha ha)
• Look for 2 properties in the same area (very close)
• Parent buys own new small property
• Parent gifts us remaining money from sale of her house to buy our own home, hopefully with her living 7+ years to remove issues with inheritance tax
• Make sure all siblings are aware of plans/ideas

I know this sounds very basic, but would that be the general thinking from all the brains here?
(God you lot know our stuff!)

The 4th option would be a very foolish option for her unless she has substantial other assets to fall back on if it all went wrong. She would basically be risking her long term security. What happens to her if you had to sell up because for of financial difficulty or divorce? What happens to her if you die before her?

The LA would almost certainly treat it as deliberate deprivation of assets. As for IHT the 7 year rule does not apply where she still benefits from the gift. 

Sorry that's just incorrect.

Doa - needs intention and an expectation that long term care will be needed (just being 82 doesn't mean one will go into care) at the point of making the gift. The LA can't just willy nilly decide, there's guidance they need to follow. There's nothing in the OP's post to indicate that this would be seen as doa.

IHT - The OP has said "Parent gifts us remaining money from sale of her house to buy our own home" How is the mum benefiting from the gift if she's bought her own house and the gift to the son is for them to buy their own house which she will neither live in not have an interest in.

Unless I read the opening post incorrectly if they went down this route she should be moving into the same property so yes she will still have an interest in it.

Even if DoA was avoided she will have lost ability to self fund risking an ‘over my dead body grove’ care home. Hopefully this will never be needed and living close to family does lower the risk. The other major issue is a major family rift with the siblings loosing their inheritance. 

The post that you quoted in your post clearly said that the mum would be buying her own home and gifting the rest to the son to buy their home.

Doa isn't an obvious issue for a healthy 82 year old living independently but you're right about the other potential risks.