Advice on inheritance Tax, probate, capital gain tax

caretaker54

Please can you help or advice if my mums dies, does she or the children have to pay above inheritance Tax, probate, capital gain tax.

My father passed away in 2012 and then my brother then transferred the name to my mum back in 2013.

She has 3 sons and 2 daughters and 10 grand kids

She only has this house and no other savings or assets.

House value will be less than £250,000

I am sure there will be no inheritance tax, as it is less than £325,000  and plus my dad died so the inheritance on my mum comes to £600,000, as his inheritance passes to her partner which is my mum.

If there is no will made then it will go to probate and all 5 siblings will get equal share according to uk law.

She can not make a will now, as she has dementia.

one more question to avoid care fee can we put the property in trust , as we all 5 siblings paid the mortgage back in 1991 and also building work carried over from 1994 till today date, as we all put money towards the property, but we left the property in just mum name, as we did not wanted create complication having 5 sibling names, as we used to all live in the same household and this is why we all chipped in paying mortgage and building works since 1991.

Theoretically we all 5 siblings have share  in the property, as we contributed into the paying off the mortgage as whole family siblings and also contributed into the building whilst we all use to live together in that house until 2020.

since Then she has been living on her own and has carers comes in 7 days a week.

bunnygo

to answer the first question; the estate pays all those bills.

care home fee avoidance is always iffy. As the house is in your mum's name and she needs care now, no local authority worth their salt will see any efforts as anything other than deprivation of assets. You looked after your parents by maintaining their home, now the house will look after your mother by paying for her care.

Probably not what you want to hear, sorry.

Keep_pedalling

Having to go to probate is nothing to do with whether a will is made or not, having no will means you apply for letters of administration rather than probate but there is little difference in the process. 

She would need to have over £1M in assets before IHT was an issue, and CGT would only be in the picture if she made the terrible decision to put the house in trust.

Please forget a trust it would be foolish thing to do and not in her best interests. I suggest you Google deliberate deprivation of assets.

p00hsticks

caretaker54 said:

I am sure there will be no inheritance tax, as it is less than £325,000  and plus my dad died so the inheritance on my mum comes to £600,000, as his inheritance passes to her partner which is my mum.

I'm not quite following this sentence. 
Were your mum and dad married ?
Did you mean to say 'his inheritance passes to his partner...'  ?
If they weren't married, presumably he left a will leaving his assets to your mother ?

poseidon1

caretaker54 said:

Please can you help or advice if my mums dies, does she or the children have to pay above inheritance Tax, probate, capital gain tax.

My father passed away in 2012 and then my brother then transferred the name to my mum back in 2013.

She has 3 sons and 2 daughters and 10 grand kids

She only has this house and no other savings or assets.

House value will be less than £250,000

I am sure there will be no inheritance tax, as it is less than £325,000  and plus my dad died so the inheritance on my mum comes to £600,000, as his inheritance passes to her partner which is my mum.

If there is no will made then it will go to probate and all 5 siblings will get equal share according to uk law.

She can not make a will now, as she has dementia.

one more question to avoid care fee can we put the property in trust , as we all 5 siblings paid the mortgage back in 1991 and also building work carried over from 1994 till today date, as we all put money towards the property, but we left the property in just mum name, as we did not wanted create complication having 5 sibling names, as we used to all live in the same household and this is why we all chipped in paying mortgage and building works since 1991.

Theoretically we all 5 siblings have share  in the property, as we contributed into the paying off the mortgage as whole family siblings and also contributed into the building whilst we all use to live together in that house until 2020.

since Then she has been living on her own and has carers comes in 7 days a week.

As regards trust of the house, even if it were advisable ( which it is not), you have already intimated your mum's dementia prevents her drawing up a will.

The same of course applies to creating a trust. Sadly, she now has no legal capacity to do anything meaningful by way of estate planning. The funds you and your siblings contributed to the house in 1991, could indeed now be eroded by local authority care fees.

caretaker54

bunnygo said:

to answer the first question; the estate pays all those bills.

care home fee avoidance is always iffy. As the house is in your mum's name and she needs care now, no local authority worth their salt will see any efforts as anything other than deprivation of assets. You looked after your parents by maintaining their home, now the house will look after your mother by paying for her care.

Probably not what you want to hear, sorry.

Thank you for your reply.

Property we left in our mums name for simple reason, as to keep me mum safe in her own property and she can not be pushed out by family member, as she has her own privacy and dignity to live in her own house.

Property is in my mother name solely and we kept it like that by the advice of the local priest and he told me these days i have seen so many cases, when it comes to parent and money they usually (siblings) sell the property and can make you mum homeless, so this is why i left it in my mums name for this reason , so she cant be made homeless and she can do whatever she wants in her own house.

we have carers 7 days a week few hours a day.

I have power of Attorney and health one as well. so now it will go to probate due to no will made.

caretaker54

Keep_pedalling said:

Having to go to probate is nothing to do with whether a will is made or not, having no will means you apply for letters of administration rather than probate but there is little difference in the process. 

She would need to have over £1M in assets before IHT was an issue, and CGT would only be in the picture if she made the terrible decision to put the house in trust.

Please forget a trust it would be foolish thing to do and not in her best interests. I suggest you Google deliberate deprivation of assets.

Thank you for your reply.

She has threshold of £650,000, as my father never used his IHT and this must of been transferred to my Mother i presumed automatically, when he died in 2011.

I have not put the property in Trust as yet, but to protect the property where the 5 siblings paid into Mortgage and building work, so this is the reason wanted to put it in trust to protect the property from being used for care fees.

We never had the record which amount given and so on, as we used to give wages to our parents to help out in mortgage, bills, maintenance and we just put money in one pot and did not write how much each sibling paid.

So i need to seek legal advice, as i did ask solicitor on the IHT and they said you don't need to pay, as it will be £325,000. I didn't ask CGT or care fees.

caretaker54

p00hsticks said:

caretaker54 said:

I am sure there will be no inheritance tax, as it is less than £325,000  and plus my dad died so the inheritance on my mum comes to £600,000, as his inheritance passes to her partner which is my mum.

I'm not quite following this sentence. 
Were your mum and dad married ?
Did you mean to say 'his inheritance passes to his partner...'  ?
If they weren't married, presumably he left a will leaving his assets to your mother ?

Yes my mum and dad married in 1967.

Father passed away in 2011

yes i was told my father inheritance passes to mother, which is £325,000 and my mum has £325,000, so total £650,000 and the property will be less than £250,000 value and she has no investment, property, savings, just this property.
My father did not make a will or left anything in the will , i presume my father passed away and the property must of transferred to my mums name.

caretaker54

poseidon1 said:

caretaker54 said:

Please can you help or advice if my mums dies, does she or the children have to pay above inheritance Tax, probate, capital gain tax.

My father passed away in 2012 and then my brother then transferred the name to my mum back in 2013.

She has 3 sons and 2 daughters and 10 grand kids

She only has this house and no other savings or assets.

House value will be less than £250,000

I am sure there will be no inheritance tax, as it is less than £325,000  and plus my dad died so the inheritance on my mum comes to £600,000, as his inheritance passes to her partner which is my mum.

If there is no will made then it will go to probate and all 5 siblings will get equal share according to uk law.

She can not make a will now, as she has dementia.

one more question to avoid care fee can we put the property in trust , as we all 5 siblings paid the mortgage back in 1991 and also building work carried over from 1994 till today date, as we all put money towards the property, but we left the property in just mum name, as we did not wanted create complication having 5 sibling names, as we used to all live in the same household and this is why we all chipped in paying mortgage and building works since 1991.

Theoretically we all 5 siblings have share  in the property, as we contributed into the paying off the mortgage as whole family siblings and also contributed into the building whilst we all use to live together in that house until 2020.

since Then she has been living on her own and has carers comes in 7 days a week.

As regards trust of the house, even if it were advisable ( which it is not), you have already intimated your mum's dementia prevents her drawing up a will.

The same of course applies to creating a trust. Sadly, she now has no legal capacity to do anything meaningful by way of estate planning. The funds you and your siblings contributed to the house in 1991, could indeed now be eroded by local authority care fees.

Thank you for your reply.

Putting in a trust is NO NO then and not advisable .

If she had to go care home we do not stand a chance to protect the property.

We really hard graft and put money and time into this house and it would be really shame the money we invested in this property to be eroded by care fee. we are already paying from our own pocket £300.00 a week to give extra care.

Keep_pedalling

The thing that could have been done is for the money she received from her children to pay off the mortgage was treated as a loan with a charge against the property to protect this contribution. 

It is probably too late after all this time to do this now. 

Dies your mother get attendance allowance to help with her care costs? Does she get any other benefits she might be entitled to such as pension credit?