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Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10180
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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My mother is frail and does not now want to live on her own.

Customer Question

My mother is frail and does not now want to live on her own. I need to sell me house (town house) as she cannot manage our stairs etc and then I want to purchase my mothers house for £300k it is valued at about £375k, my mother has three children and has said that actual price paid would be £200k (effectively I am getting £100k early inheritance, paying my brothers each £100k each and my mother gets nothing). We would move in with my mother and convert her two bed bungalow to a four bed (cost £150k). Therefore we would pay £100k each to my brothers, £150k for conversion and care for my mother until the end of her life. Is this possible and what would the tax implications etc be?
Submitted: 28 days ago.
Category: Law
Expert:  Nicola-mod replied 26 days ago.
Hello,
I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.
I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.
Thank you!
Nicola
Expert:  Nicola-mod replied 25 days ago.
Hello,
I apologise as we have not yet been able to find a Professional to assist you. Do you wish for me to continue to search for someone to assist you or would you like for us to close your question at this time?
Thank you for your patience,
Nicola
Customer: replied 25 days ago.
I will wait another 24 hours in the hope that you can assist and then will source alternative help. Thank you
Expert:  Nicola-mod replied 24 days ago.
Hello,
We will continue to look for a Professional to assist you.
Thank you for your patience,
Nicola
Expert:  Aston Lawyer replied 24 days ago.

Hi, I appreciate you have been waiting for a long while for assistance. I am able to assist you if you are still interested? I will await to hear from you. Kin Regards Al

Customer: replied 24 days ago.
I will still wait please give me an update
Expert:  Aston Lawyer replied 24 days ago.

Hi, thanks for your reply. I take it that you will need a Mortgage to finance the purchase? Al

Customer: replied 24 days ago.
I think it is likely that we would sell our property but in order to finance the works in the house and to provide my brothers with their share we would have to take out a mortgage of approx £150k. Kind regards Kerry
Expert:  Aston Lawyer replied 24 days ago.

Hi Kerry, thanks. Well, firstly, it is possible for you to proceed with the purchase- most High Street (but not all) Mortgage Lenders would grant you a Mortgage in principle even if your Mother is to remain living in the property- you would have to explain that this is a family arrangement. As regards ***** ***** position, there are 2 aspects- 1. You will have to pay Stamp Duty (as you would for any purchase). The Stamp Duty laws are slightly complicated, but you would be liable for paying it on £300,000 as Stamp Duty is payable on the amount of "cash" you are paying plus any element of any gift being given to you. 2. Your Mother would pay no tax, but if her Estate was liable for Inheritance tax when anything happens to her, her Executors would have to declare that she had made a lifetime gift of £175,000 to you (being the market value of the property less the £200,000 you are paying her). Under Inheritance tax laws, normally any lifetime gift is excluded from the value of the Estate for Inheritance tax purposes if the donor (your Mother) survives for 7 years. However, as your Mother is "retaining an interest" in the property (ie she is to remain living there), the full sum of £175,000 would be treated as being within her Estate even if she were to survive for 7 years. So, this amount would be added to the other assets she owns at the date of death, when calculating if her Estate is liable for Inheritance tax. I hope this assists and I haven't confused you! Please let me kow if you require any further clarification. Kind Regards Al

Expert:  Aston Lawyer replied 23 days ago.

Hi, can I be of any more assistance to you?

Kind Regards

Al

Expert:  Aston Lawyer replied 21 days ago.

If I have answered your question, I would be grateful if you could rate my answer. Thanks Al

Customer: replied 17 days ago.
Hi Sorry I was away. TI believe I am still in the one week period. Thank you for your answer. Can you tell me whether if we purchase the house for £200 whether my mother can then give £100,000 to each of my brothers and would that be as you mentioned above a gift? or would they have to pay tax on that?
Expert:  Aston Lawyer replied 17 days ago.

Hi, thanks for your reply. If your Mother were to gift £100,000 to each of your brothers, this would be classed as a lifetime gift and for Inheritance tax purposes, tax would be payable IF your Mother were to die within 7 years of making the gifts. If she survived for 7 years, then no tax would be payable. If your Mother were to die within the 7 year period, the gifts would then become liable to Inheritance tax- at a sliding rate depending on how long the time was between making the gift and the date she died. I hope this helps. If so, I would be grateful if you could rate my answer. Kind Regards Al

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