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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 26070
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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my mom lives in a council house and has done for many years.

Resolved Question:

my mom lives in a council house and has done for many years. we (her children) would like to buy the property in my mothers name. My mother recieves a care p[ackage since she had a stroke over 2 years ago. If we buy this property for my mother will she then be liable to pay for her own care costs as she now lives on benefits. My mother is 80 years old.
Submitted: 3 years ago.
Category: Law
Expert:  Joshua replied 3 years ago.

Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

May I ask your principle aim in buying your mothers property please?

Customer:

to take advantage of right to buy scheme.

Customer:

also my mother wishes to leave this to our family in her will

Joshua :

thank you for the above. I apologise for the delay in reverting to you-I have been in a meeting

Joshua :

the most common approach that families use when considering providing financing the purchase parents Council house under the discount right to buy scheme is not to place the property into their parents, or in this case, your mothers name. To do so, can allow property to claimed by the local authority in respect of care fee provision and also can affect benefits and other entitlements as the property would need to be declared as belonging to your mother

Joshua :

accordingly, a better approach is to consider the use of a life interest trust. This is a trust settlement which is relatively straightforward to enter into using a solicitor, whereby you and your siblings who are jointly to purchase the property agree the shares which each of you will have in the property when it is eventually sold and also provide that your mother has a life interest in the property-namely a right to enjoy and live in the property for the rest of her life

Joshua :

the advantage of this arrangement is that the property does not actually belong to your mother but rather she merely has the use of the property. This prevents the council making any claims against the property in respect of care fee provision and maintenance property ultimately belongs to you and your siblings and such shares as you provide for. at the same time, it gives your mother security because she cannot be forced by anyone to move out of the property against her wishes

Joshua :

finally, it can be extremely effective for tax purposes because when your mother comes to pass away, if she has a life interest in the property, the purposes of tax, the property is treated as belonging to her and accordingly, you and your siblings take the property back after your mother's passing at the value it is then worth. this is important from the point of view of capital gains tax because then we need come to sell the property at a later date, you would pay capital gains tax on the difference between the value of the property as at your mother's passing and the value when you come to sell it which essentially means if you sell in a relatively short period of time after your mother's passing, you are unlikely to have to pay capital gains tax whatsoever

Joshua :

most solicitors will be able to set up a life interest trust for you relatively inexpensively. Ideally, you would use a solicitor that specialises in trusts and taxation rather than a general solicitor. Most medium and larger firms have a private client department in which you would find such a specialist solicitor

Joshua :

is there anything above I can clarify for you?

Customer:

I will mull this over and may get bacl

Customer:

back to you thanks

Joshua :

certainty. If I can assist any further as the situation develops, please do not hesitate to contact me

Joshua :

If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with though please reply back to me though.

Customer:

I was given information i had not been aware of at all. this will be useful.

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