Gifting house and living in it afterwards

Rigpig66

HI can anyone advise please, 

I own a house with my mum at current for the last 5 years it has been joint owned and we both live in it, we are now looking at mum gifting me her half so I am sole owner. I am then looking to remortgage and do alternations to it, however both of us will still live in the house afterwards.
Simple right??? I have been told by one person mum would just need to sign Occupiers consent form but by another it would be complicated and wouldn't get passed as 'overriding rites of residency' wouldn't allow her to remain in the house if i remortgaged on my own?

Any advice on this one?

user1977

Rigpig66 said:

we are now looking at mum gifting me her half so I am sole owner. 

Why do you want to do this?

propertyrental

What is the purpose? Trying to achieve...?

1st ting that jumps to mind is it's a 'Gift With Reservation' (the reservation being that mum can still live there) so her half would still be included in her Estate for Inheritance Tax purposes if she died.

I guess the problem is re-mortgaging? Mum is perhaps unable to be on a joint mortgage? Have you checked with an independent mortgage broker?

Rigpig66

We are wanting to do this to build onsuite and change the layout. And she’s 75 so no can’t get mortgage with her on it for the amount needed. Only up to her 80th 

Sea_Shell

What about equity release?

sheramber

If your mother needed care in the future it could be considered deprivation of assets and the value of her share would be assumed to be still hers to be used to pay towards her care fees.

km1500

sheramber said:

If your mother needed care in the future it could be considered deprivation of assets and the value of her share would be assumed to be still hers to be used to pay towards her care fees.

only if she claimed means tested benefits. Otherwise the council does not care.

Yes your mother can gift her share to you and live there with no forms  to fill out shecwould simply be a mum living in her daughter's house.

The only tax to.pay may be IHT. If she survives 7 more years there will be none. If her estate including the house bit is less than the threshold (currently 325k) there will be none.

Go ahead with your plans if you wish. Forget equity release.

propertyrental

km1500 said:

sheramber said:

If your mother needed care in the future it could be considered deprivation of assets and the value of her share would be assumed to be still hers to be used to pay towards her care fees.

The only tax to.pay may be IHT. If she survives 7 more years there will be none. 

It's a 'Gift with Reservation'. The 7 year rule won't apply. So her share will remain in her Estate.

dimbo61

Your mum owns 50% of a property with you owning the other 50%
Any mortgage at the moment ?
It's her principal  residence so not only has she got £325,000 Inheritance tax  allowance but also £175,000 principal  residence relief
IE a total Inheritance tax  allowance of £500,000 IF she owns  or part owns a home.
Giving you half the house maybe a terrible idea for some of the reasons other have mentioned 

sheramber

km1500 said:

sheramber said:

If your mother needed care in the future it could be considered deprivation of assets and the value of her share would be assumed to be still hers to be used to pay towards her care fees.

only if she claimed means tested benefits. Otherwise the council does not care.

Yes your mother can gift her share to you and live there with no forms  to fill out shecwould simply be a mum living in her daughter's house.

The only tax to.pay may be IHT. If she survives 7 more years there will be none. If her estate including the house bit is less than the threshold (currently 325k) there will be none.

Go ahead with your plans if you wish. Forget equity release.

if there is not money for the renovations it seems unlikely that the mother would have capital to pay her own care home fees.. 

Rigpig66

Thank you, inhetance tax im would be minimal 
propertyrental said:

What is the purpose? Trying to achieve...?

1st ting that jumps to mind is it's a 'Gift With Reservation' (the reservation being that mum can still live there) so her half would still be included in her Estate for Inheritance Tax purposes if she died.

I guess the problem is re-mortgaging? Mum is perhaps unable to be on a joint mortgage? Have you checked with an independent mortgage broker?

propertyrental said:

What is the purpose? Trying to achieve...?

1st ting that jumps to mind is it's a 'Gift With Reservation' (the reservation being that mum can still live there) so her half would still be included in her Estate for Inheritance Tax purposes if she died.

I guess the problem is re-mortgaging? Mum is perhaps unable to be on a joint mortgage? Have you checked with an independent mortgage broker?

Thanks all I’m in talks with a mortgage advisor today, as for care it would come to that decision if ever needed. No assessor savings and the only thing she had is half this house value which is £130,000 (valued at 260000 so minimal in IH tax too!

we shall see what the mortgage advisor says