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Sjwalls
Posts: 1 Newbie
My Mum is upping sticks and moving nearer to us as she is now in her early 70s. She's mortgage free and will be a full cash buyer on any new property. Is there any benefit or is it even possible for me to be named on the deeds as co-owner to her new property? Obviously we're thinking about long term implications, should she eventually need to go in a home or just when she eventually calls time.
Any advice or previous experience welcomed.
Any advice or previous experience welcomed.
0
Comments
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should she eventually need to go in a home
If you are thinking of a gift to avoid care home fees
http://www.whentheygetolder.co.uk/care-fees-funding-and-deprivation-of-assets-the-rules/
Your mother might wish to ensure that she has made a will.
She might want to look into granting Power of Attorney.
https://www.gov.uk/power-of-attorney/overview0 -
Yes it's possible and legal. You simply put both your names on the purchase contract and on the Land Registry forms. And she hands over the cash to the seller.
However as others have said, there are other considerations.
1) CapitalGains Tax. It is not your main home, so if/when the property is sold (eg to pay her care costs?), you will have to pay CGT on your share (50% assuming you own 50/50).
2) If you currently own a property (do you?) the purchase will be a 2nd property so trigger an addional 3% SDLT
3) If/when she went into care, it is likely the lacal authority would consider your 50% ownership as either
* a 'gift with reservation' by her - ie she gave half the house away whilst still remaining the sole resident, or
* 'deprivation of assets' ie deliberatley giving an asset away in order to benefit from government benefits
They'd both value the entire property to see if it exceeded the amount entitling LA care support, and force a property sale.
4) the 'gift' of 50% of the property would remain in her Estate for Inheritance Tax purposes unless she survived 7 years.
5) Any difficulties (eg financial) you get into in the future might impact her as creditors could put a Charge on 'your' property.
6) if you are married, and get divorced (I know, but noone expects divorce till it happens!), your spouse could claim a share of the property, leaving your mum.....
There may be other consequences to consider. It's not a simple decision!0 -
My Mum is upping sticks and moving nearer to us as she is now in her early 70s. She's mortgage free and will be a full cash buyer on any new property. Is there any benefit or is it even possible for me to be named on the deeds as co-owner to her new property? Obviously we're thinking about long term implications, should she eventually need to go in a home or just when she eventually calls time.
Any advice or previous experience welcomed.
If she ever needs to go into care (and most people don't) then unless she wants to have no choice in where she ends up and is prepaired to risk being placed in some dreadful place, she needs to hold on to sufficient assets to retain control of what happens to her, so she should not give her home away unless she has plenty of other assets to fund care.
As for making it easier after death, the reverse will actually be the case because you will be looking at a potencial capital gains tax bill to pay.
Also consider what would happen to her in the event that you pre decease her, go bankrupt or get divorced. All of those events could leave her in a very dodgy position.0 -
So am I to understand if she needs care, you wanted me and other tax payers to pay, so you can get $$$$
I think I'll just go outside and enjoy the weather rather than say what I really think
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4) the 'gift' of 50% of the property would remain in her Estate for Inheritance Tax purposes unless she survived 7 years.
Unless your Mum pays full market rent to you (which would be taxable income) for 'your' share of the house, then however long your Mum lived after the gift, it would remain as part of her estate.
The 7 year rule does not apply to Gifts with Reservations, which is what the house would be (as your Mum would still be getting the benefit of living in the house, so it is not considered a true gift).
You would also need to pay CGT on the increase in value from the date of the transfer to when it is sold.0
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