Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • AdamFlood
    • By AdamFlood 6th Aug 18, 1:27 PM
    • 1Posts
    • 0Thanks
    AdamFlood
    Mum gifting half of money from downsizing
    • #1
    • 6th Aug 18, 1:27 PM
    Mum gifting half of money from downsizing 6th Aug 18 at 1:27 PM
    Good day

    My mother (aged 77) is downsizing her home (offers accepted on both sides) and would like to give me (only son) half of the surplus cash (around 50k). I've chatted to 3 solicitor firms re conveyancing and this gift and have received different advice from each.

    Any advice on how best to do this with regards to IHT and if I should get an indemnity policy (as advised by one firm) in case my mother goes bankrupt (I said I can't see this happening as she doesn't have any business interests but they said I should in case) will be much appreciated.

    Also, my mother wants me to have the house in full when she does pass away (she's in good health currently) and doesn't want the state to get it if she needs care, so suggested we put the new place in my name. It will still be her home and I will continue to live in another house I rent elsewhere.

    I was fortunate to inherit my late father's property 10 years ago (no mortgage) in Wales which I rent out so I know the stamp duty will be higher for the purchase of my mother's new place if it goes into my name.

    Again, any advice ion this aspect will be much appreciated. Thanks
Page 1
    • lisyloo
    • By lisyloo 6th Aug 18, 1:37 PM
    • 22,237 Posts
    • 10,883 Thanks
    lisyloo
    • #2
    • 6th Aug 18, 1:37 PM
    • #2
    • 6th Aug 18, 1:37 PM
    and doesn't want the state to get it if she needs care

    2 bit of advice.


    Firstly there are rules in place to stop your mother giving away her assets to get state benefits. It's called "deliberate deprivation of assets" (that's not a moral judgment on my part, that's the proper name so you can google/research further).
    If she did need state benefits and the LA decide this was done deliberately then thy can roll back the transaction. There is no time limit for this.
    House transactions are very traceable.
    If your mother were on the other hand to give you a few ks in generous Xmas/birthday/anniversary presents then that would possibly be less traceable and might not fall into the realms of deliberate deprivation.
    Bit of a grey area, but it's certainly ok to give gifts.
    I'm a little suprised neither solicitor has mentioned this but I guess it depends on the extent of your chats.


    Secondly I've been involved in visiting many care homes recently (about 20) and some the local authority ones fall under the category of OverMyDeadBody. Let's call then OverMyDeadBody grove.
    I mean people being cold (and unable to get themselves a jumper/blanket), stench or urine, dressings hanging off, filthy toilets.


    We also had the experience of the LA trying to put my FIL in a different home to MIL after 60 years of marriage to save money (with suggestions at every possible opportunity that family could pay). We fought and won, but the point is they might not put your mum somewhere convenient for her children/grandchildren/siblings to visit.



    So lets suppose the transaction doesn't get picked up as deliberate deprivation. Do you want her in OverMyDeadBody Grove, miles away from her children/grandchildren? - as that is often what is offered by the local authority.
    • Pixie5740
    • By Pixie5740 6th Aug 18, 1:37 PM
    • 12,656 Posts
    • 18,040 Thanks
    Pixie5740
    • #3
    • 6th Aug 18, 1:37 PM
    • #3
    • 6th Aug 18, 1:37 PM
    Good day

    My mother (aged 77) is downsizing her home (offers accepted on both sides) and would like to give me (only son) half of the surplus cash (around 50k). I've chatted to 3 solicitor firms re conveyancing and this gift and have received different advice from each.

    Any advice on how best to do this with regards to IHT and if I should get an indemnity policy (as advised by one firm) in case my mother goes bankrupt (I said I can't see this happening as she doesn't have any business interests but they said I should in case) will be much appreciated.

    Also, my mother wants me to have the house in full when she does pass away (she's in good health currently) and doesn't want the state to get it if she needs care, so suggested we put the new place in my name. It will still be her home and I will continue to live in another house I rent elsewhere.

    I was fortunate to inherit my late father's property 10 years ago (no mortgage) in Wales which I rent out so I know the stamp duty will be higher for the purchase of my mother's new place if it goes into my name.

    Again, any advice ion this aspect will be much appreciated. Thanks
    Originally posted by AdamFlood
    Who does your mother think should foot the bill should she require care later in life?

    You could go along with her little ruse but there's a good chance the council could claw back the capital she has given away under the Deprivation of Assets rules.
    • Tom99
    • By Tom99 6th Aug 18, 1:43 PM
    • 2,487 Posts
    • 1,677 Thanks
    Tom99
    • #4
    • 6th Aug 18, 1:43 PM
    • #4
    • 6th Aug 18, 1:43 PM
    If your mother lives in the house rent free it will still count as hers for IHT with no 7 year time limit and you will be liable to CGT on any gain over market value during your ownership.
    • lisyloo
    • By lisyloo 6th Aug 18, 1:49 PM
    • 22,237 Posts
    • 10,883 Thanks
    lisyloo
    • #5
    • 6th Aug 18, 1:49 PM
    • #5
    • 6th Aug 18, 1:49 PM
    I've chatted to 3 solicitor firms re conveyancing and this gift and have received different advice from each.

    Perhaps you've only had very informal chats.
    But if none have mentioned the issues above then they are not very good solicitors.
    • Linton
    • By Linton 6th Aug 18, 2:14 PM
    • 9,560 Posts
    • 9,765 Thanks
    Linton
    • #6
    • 6th Aug 18, 2:14 PM
    • #6
    • 6th Aug 18, 2:14 PM
    Seems to me that giving you her money and putting her new home in your name is unnecessarily risky for her ....

    What happens if the house has to be sold? eg:
    - you go bankrupt
    - you divorce and the capital from her house is needed for the divorce split
    - you die
    - you need state benefits but the house is regarded as one of your assets?
    Is Mum out on the streets?

    Will you charge her a commercial rent for living in your house? If not and you bought the house with her money it could be regarded as a "Gift with Reservation" and so included in her estate for IHT purposes.

    If she needs to go into care the council could regard the gift as "deprivation of assets" and so included in her assets for calculation of the councils contribution to her care.

    If she keeps her money she has much more freedom as to how it is spent should she need support. eg she may want to spend it on care of her choice at home rather than in a care home. She also would have more choice if she does have to go into a care home. The majority of old people do not go into a care home.

    Note that the state doesnt take the money if one does need to go into care. Rather, the council use the amount of assets someone owns to determine how much they are prepared to pay for as benefits - its a means test. It is then up to the person concerned or their representative to make whatever arrangements are needed to pay for the rest.

    Giving away ones money to gain from council payment of care costs does not seem very different to me to stopping working and giving away ones home to claim housing benefit.

    So I strongly suggest she doesnt do it. She should use her money for her own needs and only if there is any left over should it go the to her beneficiaries.
    Last edited by Linton; 06-08-2018 at 2:16 PM.
    • lisyloo
    • By lisyloo 6th Aug 18, 2:45 PM
    • 22,237 Posts
    • 10,883 Thanks
    lisyloo
    • #7
    • 6th Aug 18, 2:45 PM
    • #7
    • 6th Aug 18, 2:45 PM
    note that should she require care in her own home, then the value of her residence will not count towards the means test (ive done it twice).


    its a lot easier these days for people to remain in their own homes (and often cheaper) as we now have a variety of tech options which can help keep people safe
    • Mojisola
    • By Mojisola 6th Aug 18, 2:48 PM
    • 29,602 Posts
    • 75,685 Thanks
    Mojisola
    • #8
    • 6th Aug 18, 2:48 PM
    • #8
    • 6th Aug 18, 2:48 PM
    note that should she require care in her own home, then the value of her residence will not count towards the means test (ive done it twice).

    its a lot easier these days for people to remain in their own homes (and often cheaper) as we now have a variety of tech options which can help keep people safe
    Originally posted by lisyloo
    Between the shortage of care home places and the council's unwillingness to pay, most people will stay in their own homes far longer than before - whether that's the best solution for them or not.

    I'd rather have my own capital so that I can chose the best option for me if that time comes.
    • lisyloo
    • By lisyloo 6th Aug 18, 3:18 PM
    • 22,237 Posts
    • 10,883 Thanks
    lisyloo
    • #9
    • 6th Aug 18, 3:18 PM
    • #9
    • 6th Aug 18, 3:18 PM
    Between the shortage of care home places and the council's unwillingness to pay, most people will stay in their own homes far longer than before - whether that's the best solution for them or not.
    Originally posted by Mojisola
    True.
    If you are at the mercy of the local authority then you'll only get what they deem you need.
    I've had good experiences of that, others less so and there can be undue pressure put on relatives who might themsleves be elderly.


    I don't think people think through what they are saying when they plan to put themselves at the mercy of a cash strapped local authority.



    I'd rather have my own capital so that I can chose the best option for me if that time comes.
    Don't forget about not having capacity too.
    My MIL didn't have capacity, so having capital is great but you need to also put lasting power of attorney in place.
    I am now dealing with the fallout of MIL not having that (despite us telling her to).
    Last edited by lisyloo; 06-08-2018 at 3:28 PM.
    • xylophone
    • By xylophone 6th Aug 18, 3:34 PM
    • 26,090 Posts
    • 15,456 Thanks
    xylophone
    Also, my mother wants me to have the house in full when she does pass away (she's in good health currently) and doesn't want the state to get it if she needs care, so suggested we put the new place in my name. It will still be her home and I will continue to live in another house I rent elsewhere.
    https://www.aprilking.co.uk/2017/01/30/deprivation-of-assets-guide/

    For the Local Authority to take action, they would need to show that your intention at the time of disposal was to exclude the property from means testing to avoid care fees.

    Your mother is 77. She is fit and well and may remain so but the strong possibility is that care/assistance in the years to come will be required

    She remains in the house which she has bought with her money but gifts the property to you - what would the man in the street (let alone the LA/Appeal judge) make of this do you think?

    I was fortunate to inherit my late father's property 10 years ago (no mortgage) in Wales which I rent out


    Fortunate indeed - and you now propose that taxpayers who may be in a far less fortunate situation than you are should pay the cost of your mother's care while you increase your assets at their expense?

    The greed that passeth all understanding?
    • Ozzuk
    • By Ozzuk 6th Aug 18, 4:23 PM
    • 1,393 Posts
    • 2,014 Thanks
    Ozzuk
    Should your mother need care then to avoid paying for it she could move in with you, you may have to give up work/reduce your hours though. Not an easy thing to take on.

    I've no idea if this is feasible, but you could look into if you can pay the care fees, but I'd bet that will mount up very quickly and could surpass what you will get from the house.

    Either option is preferable to me paying though
    • teddysmum
    • By teddysmum 6th Aug 18, 4:28 PM
    • 9,067 Posts
    • 5,411 Thanks
    teddysmum
    Another point is that at home care provided by LAs often falls short of what is needed (not enough time allocated) so having her own money means she can buy in extra, to make herself more comfortable.
    • Keep pedalling
    • By Keep pedalling 6th Aug 18, 4:45 PM
    • 5,282 Posts
    • 5,900 Thanks
    Keep pedalling
    It sounds like you are already financially better off than her. She should hang on to all her assets, to make sure she can see out the latter part of her life in comfort. This includes the ability to chose when where she receives care should it be required.
    • lisyloo
    • By lisyloo 6th Aug 18, 6:34 PM
    • 22,237 Posts
    • 10,883 Thanks
    lisyloo
    Another point is that at home care provided by LAs often falls short of what is needed (not enough time allocated) so having her own money means she can buy in extra, to make herself more comfortable.
    Originally posted by teddysmum
    I don!!!8217;t see how you can buy in extra care.
    Care homes have insurance and wouldn!!!8217;t let private carers into their premises due to liability issues.
    You can upgrade to a better home.
    You can buy hairdos, manicures etc to make life a bit better if you!!!8217;re confined to a chair/bed 24/7.

    You can buy extra help if you are in your own home.

    Most people do NOT end up in a care home I.e. die before they get to it.
    • elsien
    • By elsien 6th Aug 18, 6:42 PM
    • 16,884 Posts
    • 42,627 Thanks
    elsien
    I don!!!8217;t see how you can buy in extra care.
    Care homes have insurance and wouldn!!!8217;t let private carers into their premises due to liability issues.
    You can upgrade to a better home.
    You can buy hairdos, manicures etc to make life a bit better if you!!!8217;re confined to a chair/bed 24/7.

    You can buy extra help if you are in your own home.

    Most people do NOT end up in a care home I.e. die before they get to it.
    Originally posted by lisyloo
    People buy in someone to help them access the community and go out to activities if they are in one of the many homes where staff going out with people isn't an available option.
    All shall be well, and all shall be well, and all manner of things shall be well.

    Pedant alert - it's could have, not could of.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

1,474Posts Today

8,517Users online

Martin's Twitter
  • Ta ta... for now. This August, as I try and do every few yrs, I'm lucky enough to be taking a sabbatical. No work,? https://t.co/Xx4R3eLhFG

  • RT @lethalbrignull: @MartinSLewis I've been sitting here for a good while trying to decide my answer to this, feeling grateful for living i?

  • Early days but currently it's exactly 50 50 in liberality v democracy, with younger people more liberal, older more? https://t.co/YwJr4izuIj

  • Follow Martin