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Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10451
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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My parents have a property worth £250,000 with a 35k

Resolved Question:

My parents have a property worth £250,000 with a 35k mortgage. What are the laws concerning me buying it from the for 35k and then renting it back to them for £1 a month?
Submitted: 1 year ago.
Category: Law
Expert:  Aston Lawyer replied 1 year ago.
Hi,There is absolutely nothing stopping you from doing as you propose.Provided the Mortgage is paid off by your parents, you then become the absolute legal owner of the property and are therefore free to do with the property as you so wish. Hence, you would be free to rent it out back to your parents at whatever monthly rent you wish.However, for Inheritance tax purposes, your Parents would still be deemed to own the property, as the sale at an undervalue to you would be deemed to be a "gift with a reservation". Hence, they would be deemed to still own £250,000 less £35,000 in the property, when calculating their assets for Inheritance tax purposes. Likewise, if they needed care, the state may argue that they have deliberately disposed of their property to avoid the payment of nursing home fees. If this is argued successfully, your parents would be deemed to own the property less £35,000, when assessing their capital for nursing home purposes.I hope this assists and sets out the legal position. Kind RegardsAl
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