Deposit, Stamp Duty and Tax

Keep_pedalling

IHT is not going to be an issue here unless the OP’s mother also has large amounts of savings, because her estate can still claim the residential NRB taking her exemptions to £500k, and if she is a widow then the transferable NRBs from her husband’s estate could double that.

My main concern for her is her long term security if anything happens to the OP if she has no financial stake in the house and does not have other savings to fall back on. So what happens if the OP and her partner split up? What happens if the OP dies before her mother? What happens if theOP or her partner can no longer make the mortgage payments or go bankrupt? 

MWT

HappyDragon21 said:

• My mother is eldery so she may not live for 7 years. In which case we would have to inheritance tax on anything over £325,000 that she has put into the house.

I would worry less about the IHT problem is it is going to be small or zero unless she has a lot of other assets, but I would be concerned about her potential need for long-term residential care if she is of an age or health condition where surviving another 7 years is in reasonable doubt.

What you plan to do will not protect the proceeds of her house sale from being required to cover her care costs if residential care is required, as it will be considered deprivation of assets and the local authority will be able to take action against you to require you to repay the majority of the amount she is planning to give to you, as needed, for her care...

If an attempt to avoid those care costs is in any way motivating this plan then take some advice, as this is not a safe way to proceed.