Stamp duty assistance

darrenl_2

We have decided to become a multi generation household. My widowed mother is selling her property and we (married couple) are selling our house. We are then purchasing a bigger house using the money from our property and a 300k gift from my mother. 
My mother will not be on the deeds and will become an occupier only.
I understand the IHT rules already. 
Our solicitor has sent us a letter regarding paying a higher rate of stamp duty, 3% surcharge. 
I do not believe this to be relevant from what I can work out as both sales will complete on the same date. 
Am I correct?

Mark_d

I believe you are correct...unless you also happen to own other residential properties such as buy-to-let or holiday homes

darrenl_2

Thanks for the swift reply. We only have this property so we are not in that category.

Emmia

Any issues if your mum needs care? The proceeds from her property that she's investing in the property you and your wife will own, the council will argue should be available to pay for care if she needs it. 

Also there is an issue if you and your wife divorce - your mum has no protection for herself financially.

Brie

Emmia said:

Any issues if your mum needs care? The proceeds from her property that she's investing in the property you and your wife will own, the council will argue should be available to pay for care if she needs it. 

Also there is an issue if you and your wife divorce - your mum has no protection for herself financially.

I asked about this when we were doing exactly the same with my MiL and a legal expert through my employer said that the local authority couldn't demand money as we were providing a safe environment for MiL that essentially kept her from needing being moved to a care home.  Basically if we hadn't have done this MiL wouldn't have had the cash for a care home and would be forced to sell her house to fund it and the LA would have to fund her in the interim.  

The LA took the opposite view that we should sell our new combined home and be made homeless until they realised I was over 60 and therefore they worst they could do was put a lien on our home.  Ultimately it didn't get that far as MiL had enough to pay for the few months of care she required.  

As for divorce, perhaps the gift should be made to you only and you have a higher percentage ownership of the house as a result?  I've heard of people doing that when 1 in a couple has a larger deposit available.  

As an aside - there are all sorts of good reasons to combine households like this.  There are also all sorts of bad reasons.  Hopefully your wife (I assume your OH is female) is prepared to pick up the majority personal care as there will be that expectation.  The LA said at one point that I should stop working to be available for my MiL 24/7 despite the fact that officially my husband was her carer and was at home and I worked full time.  

Keep_pedalling

Unless your mother has significant other assets she should not gift you the money. Tho protect her long term security it should be a loan with a charge against the property to protect it in case of divorce, bankruptcy or you dying before her. 

It is not uncommon for such arrangements to go seriously wrong.