Getting equity from my parents house (no mortgages involved).

FarmGirl78

Is she getting all the benefits she's entitled to? Attendance allowance? She might also qualify for that at the higher rate. Its not means tested.

carer4mum

FarmGirl78 said:

Is she getting all the benefits she's entitled to? Attendance allowance?

Yes thanks and also the council tax exemption (to answer EssexHebridean's question).

The higher rate £92.40 Attendance allowance pushes her income to just over £300 per week, but social care is very expensive. Local care homes charge between £740 and £890 per week and live-in carers start around £875 per week (£125/day).

As I said, the council is funding some of her care (needed while I'm at work) and my mum pays the remaining hours from her income and savings. I don't charge her for my care at night, but still her depleting savings put a finite end to the current set-up (hence this thread).

km1500 said:

Don't buy a share - you will be in to excess stamp duty (assuming you already own a home), fees etc.

Thanks for the advice. I see that there is a 3% duty on second homes (equivalent to £600 on £20k. So, it seems a loan would be the best way forward money-wise.

Another concern I have is about the sale of my mother's house after she goes into full time care. Does anyone know how this works? Who is in control of the sale and the timescale (regards clearing and selling the house, etc)? Are there any advantages/disadvantages if my name is also on the deeds?

elsien

carer4mum said:

FarmGirl78 said:

Is she getting all the benefits she's entitled to? Attendance allowance?

Yes thanks and also the council tax exemption (to answer EssexHebridean's question).

The higher rate £92.40 Attendance allowance pushes her income to just over £300 per week, but social care is very expensive. Local care homes charge between £740 and £890 per week and live-in carers start around £875 per week (£125/day).

As I said, the council is funding some of her care (needed while I'm at work) and my mum pays the remaining hours from her income and savings. I don't charge her for my care at night, but still her depleting savings put a finite end to the current set-up (hence this thread).

km1500 said:

Don't buy a share - you will be in to excess stamp duty (assuming you already own a home), fees etc.

Thanks for the advice. I see that there is a 3% duty on second homes (equivalent to £600 on £20k. So, it seems a loan would be the best way forward money-wise.

Another concern I have is about the sale of my mother's house after she goes into full time care. Does anyone know how this works? Who is in control of the sale and the timescale (regards clearing and selling the house, etc)? Are there any advantages/disadvantages if my name is also on the deeds?

You are in charge of that process. The local authority aren’t going to step in to sell it, they don’t have the legal authority. 

_Penny_Dreadful

carer4mum said:

I'm asking which is the best option for releasing equity from my mother's house, should I buy a share of her house or loan her the money against the house?

I would be very grateful if anyone could offer any advise on equity release. Does anybody have any experiences or knowledge that is relevant to my question? Any help would be appreciated.

Lend your mother the money and secure the loan against the house.  That will protect your money in the event that it becomes no longer possible for your mum to receive the best care in her home and the house ends up being sold to pay for care home fees.  It would also protect your money in the event your mum passes and the house forms part of her estate.

Buying a share of her house starts to open up a can of worms involving SDLT and potentially, although unlikely, CGT.

Equity release can work in two ways.  The first would be your mum taking out an equity release product and then paying the interest monthly so that when she passes only the amount borrowed is still owing.  The other option is for there to be no monthly payments and the interest just keeps on accruing, essentially burning up any capital in your mum's home.  I have no idea how easy it would be to apply for an equity release product when you're acting as POA for your mum.

carer4mum

Lend your mother the money and secure the loan against the house.

Thanks for the advice.

Does anyone have experience of loaning money against a house? Can you charge interest to counteract the devaluing of currency right now? If so, how is the interest level decided?