Parents House - Moving in Rules

theartfullodger

Do you have PoA?  What rent will be paid to whom?  Recognise that HMRC have the power to decide what rent is being charged (usually market rent).  

Who or what will insure the place?  Do they have the right to?

Albermarle

zmblake said:

I'm not sure if there are any tax implications etc for my parents or myself? Parents are happy with the arrangement. other family members have said that this may be seen as a 'gift' but parents are self funding their own care, so we aren't claiming anything from government etc and as soon as we need to put the house on the market, we would do 

Just to be accurate 'care' is the local authorities responsibility, not the Government.
Whilst they are self funding, the local authority will not be interested in your parents finances.

Separately as others have said, you need to get Power of Attorney over both parents, if not already done so.
You can only do this whilst they are of sound mind, as they have to sign the forms and understand what they are signing. You do not need a solicitor, you can do it on line, although it takes a bit of organising and there is a cost still. 

AskAsk

user1977 said:

AskAsk said:

i can't see any tax implications at all for this scenario.

The parents would have potential liability for Capital Gains Tax in relation to the period after they move out.

only if the son paid rent to the parents, so the property would be classed as rented out.  there is no law against allowing your children to live in your house.  if there was, there would be a lot of homeless kids!

if the parents decide not to sell the property and rented it to their son, then yes, there would be a potential of capital gains tax for the number of years that the property had been rented out.  the son is not planning to pay rent to his parents from his opening statement.

AskAsk

lr1277 said:

Does the OP become a de facto tenant? In which case the parents need to take on all the responsibilities of a landlord?

if the OP and his parents were not related, it would then fall into tenancy complications but as it is his parents, there is no law about your children living with you.  Lots of kids still live at home in their 30s these days because property prices are so high that a lot of people can't afford to move out!

in this case his parents have moved into the care home but i would think the same scenario applies, that he is their son and so is staying there to look after the house until it is sold later on.  there is no law against allowing your children to live in your house.

user1977

AskAsk said:

user1977 said:

AskAsk said:

i can't see any tax implications at all for this scenario.

The parents would have potential liability for Capital Gains Tax in relation to the period after they move out.

only if the son paid rent to the parents

No, CGT has got nothing to do with whether rent is being paid. Generally speaking CGT applies to all property you own, except for your principal residence. If it isn't your main residence, it doesn't make a difference what you're using it for.

Grumpy_chap

An area to consider is whether the parents have capacity or whether the OP is acting under LPA.
If the parents have capacity, they can agree to the OP moving in.
If the OP is acting under LPA, the OP needs to demonstrate that the moving in is in the parents' best interest.

Bookworm105

AskAsk said:

user1977 said:

AskAsk said:

i can't see any tax implications at all for this scenario.

The parents would have potential liability for Capital Gains Tax in relation to the period after they move out.

only if the son paid rent to the parents, so the property would be classed as rented out.  there is no law against allowing your children to live in your house.  if there was, there would be a lot of homeless kids!

if the parents decide not to sell the property and rented it to their son, then yes, there would be a potential of capital gains tax for the number of years that the property had been rented out.  the son is not planning to pay rent to his parents from his opening statement.

in the context of this thread, the parents have moved from their main residence into long term care and therefore are entitled to the continuation of private residence relief for only a period of 36 months after moving out. CGT liability would arise after 36 months if they remain owners of it no matter who is, or is not, resident in it.

That is a specific aspect of statute law and refers to what is otherwise called the "deemed occupation period" or "final period" during which it does not matter if the property is left vacant, is occupied by someone else, or is let to tenants who actually pay rent. It is a specific extension of PRR due to long term care, rather than the 9 month extension everyone else gets when disposing of a property they have ceased to reside in themselves as their main home.

Taxation of Chargeable Gains Act 1992

Olinda99

it will not be a tenancy sas zero rent is being paid. There is no problem the son moving in.

saajan_12

lr1277 said:

Does the OP become a de facto tenant? In which case the parents need to take on all the responsibilities of a landlord?

d

FlorayG said:

lr1277 said:

Does the OP become a de facto tenant? In which case the parents need to take on all the responsibilities of a landlord?

My exact thought. OP you will be a tenant and even though you pay nothing your parents will have all the responsibilities of a landlord - however, there's nothing to prevent YOU arranging and paying for gas and electric safety checks and anything else required ( later this year landlords will need to register with a government scheme) also, as it's very unlikely you will have a 'tenant dispute' with your landlords it's less to worry about. When the house is to be sold, YOU give THEM notice to quit so that any potential buyer knows you are actually going to leave as if a landlord gives notice to quit a tenant can refuse to go
So I don't think it will cause any problems as no money is changing hands
Also, there is no gift involved as they are not giving you the property, just 'renting' it to you

It can't be an AST tenancy if the annual rent is less than £250 / £1000 a year. At zero rent, the OP would likely be an excluded occupier with a licence to reside there. That comes with significantly less landlord responsibilities, eviction doesn't need going through courts, etc. 

silvercar

Bookworm105 said:

AAskAsk said:

user1977 said:

AskAsk said:

i can't see any tax implications at all for this scenario.

The parents would have potential liability for Capital Gains Tax in relation to the period after they move out.

only if the son paid rent to the parents, so the property would be classed as rented out.  there is no law against allowing your children to live in your house.  if there was, there would be a lot of homeless kids!

if the parents decide not to sell the property and rented it to their son, then yes, there would be a potential of capital gains tax for the number of years that the property had been rented out.  the son is not planning to pay rent to his parents from his opening statement.

in the context of this thread, the parents have moved from their main residence into long term care and therefore are entitled to the continuation of private residence relief for only a period of 36 months after moving out. CGT liability would arise after 36 months if they remain owners of it no matter who is, or is not, resident in it.

That is a specific aspect of statute law and refers to what is otherwise called the "deemed occupation period" or "final period" during which it does not matter if the property is left vacant, is occupied by someone else, or is let to tenants who actually pay rent. It is a specific extension of PRR due to long term care, rather than the 9 month extension everyone else gets when disposing of a property they have ceased to reside in themselves as their main home.

Taxation of Chargeable Gains Act 1992

To add to this, there is no CGT on death. So not selling the property until the demise of the parents means there is no CGT to consider at all.