How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4094
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

My elderly mother wants to sell her house and live with me.

Customer Question

My elderly mother wants to sell her house and live with me. She wants to invest from the sale of her house in improvements such as new kitchen, decorating and extension.
we dont want her name on the deeds as thus would complicate matters in the event of her death. What, if any, are the tax implications. I am retired.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
, I'm Keith and happy to help you with your question.
This is either a gift to you by your mother or a loan. Both such matters are outside the scope of UK taxation.
However, any interest paid on loans is taxable income in the hands of the recipient.
Any gift to you may well be a Potentially Exempt Transfer (PET). PETs run off at a taper over 7 years and in the event of decease of the donor within that time will be added back to her estate Tax (IT) purposes. If the estate is insufficient to meet the IT on the PET the liability cascades down to the beneficiary payment. The classic defence against a PET is a reducing term life insurance policy, but I appreciate that if the donor is elderly premiums may be prohibitive. IT does not kick in until the estate reaches 325K and is at 40% flat rate on the surplus. The 325K is inflated by any inter spousal and charitable bequests and if the latter exceed 10% of the estate the rate of IT drops to 36%.
I do hope that I have thrown some light on your situation.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you support.