House sale, care fees and personal loan repayments

vigman

Admins, Please move this thread if in the wrong section. Thank you
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I’m getting myself into total confusion, not helped by my own very poor health and other worries, so help here is gratefully received. 

My very elderly mother has gone into care. While she was at home, I lent her £10,000 towards home care costs. I have since paid over £40,000 (@ £1,600 per week!) to the care home from my personal accounts. My brother has now put in £30,000 towards her care. 

As we are both running out of funds, her house will have to be sold c £400-450k (We haven’t sold yet as my sister stays there 2 weeks a month to visit my mother in her care home)

I have POA for my mother and a joint NatWest current bank account with her. 

So my issues are:

When the sale goes through and the house sale money goes into her account, I want to pay myself and my brother back the monies we have lent her. In another thread on this site someone said that HMRC “will have something to say about that”. Why? These are not gifts but loan repayments. (I have kept a spreadsheet of all payments we have made on her behalf and there are bank statements of our loans and payments made to the home)

How do I arrange making these large payments (£50k to me and £40k to my brother) as these can’t be done through online banking?

I will have to invest the remaining £300k+. 

Do I make these in her name using the POA? (Difficult as so many banks have closed in our nearby market town and I had to present myself with POA and passport to open the NatWest account)

The interest over several accounts will be more than the tax free sum. My mother currently has tax taken by PAYE as she has a small work pension as well as her state pension. Can these interest tax payments be made as one off payments to HMRC rather than changing to self assessment?

Notes: I decided not to take a council loan against the house to pay for mum’s care as I didn’t want to pay them the interest. 

Also I had a brief time with council direct payments for care at home but some payments that said “approved” on their system are now being asked to be repaid!

Thanks in advance for any help and advice

Brie

Not sure but this might do better on the Family board....  

Meanwhile...do you have anything documented to say you have loaned mom the money.  Likewise your brother?  I suspect you don't so you should make sure you have all the evidence that shows the money to the care home from your and your brother's account's.  (just reread things and look like you've done this already which is great)

I also suspect that the comments about HMRC might be something to do with IHT needing to be paid on gifts made in the 7 years before someone dies.  But these are not gifts from your mom to you but loan repayments.  To ensure that there is no later disagreement about anything then I would suggest you and your siblings draw up a note of some sort to say that you agree that Vig lent mom £X and Bro lent mom £Y and that is to be repaid from the proceeds of the house sale to add to your other documents.  My brothers and I had a similar document regarding our mom and her various fees and expenses.  Furthermore the various loans made were noted in mom's will as well.  

Large bank transfers may be possible with the bank's assistance otherwise you could do several smaller ones.  We had to do this moving money from my MiL's account to ours when we were buying a joint residence.  But if you are waiting until the house is sold to get the money back it's possible that it's something that the solicitor can do easily for you instead.  

Not sure if you should open an ISA to hold interest earning cash?  Otherwise I believe a self assessment would be required.  Don't sweat it - I found the process fairly straight forward when I first needed to do one a year back.  

And I'm sure that there is a way to open accounts in mom's name but with you noted as the POA.  So account name might be "Vig's Mom joint with Vig" or similar.  

Meanwhile - have you agreed with the council that no one will be paying any bills until the house is sold?