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My mother requires 24 hour care. She has asked if she can

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Hi - my mother requires 24 hour care. She has asked if she can come and live with us as she does not want to go in to a home. The problem being we are looking to put our house on the market and downsize as there is a £74000.00 final payment due on our mortgage and we will not be able to pay that off and leave ourselves comfortable with finances.
She has said that she will pay the mortgage off, but I am not sure whether that is permissible and whether there would be capital gains tax to then pay. Please could you advise? thank you - Kay
Submitted: 9 months ago.
Category: Tax
Expert:  Sam replied 9 months ago.

HI Kay

Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer.

Is this has been her main and only home right up until the day she moves out then there is no capital gains tax, as any profit made is exempt under the private residence relief rules.

Link here re rules https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet

The only consideration to be had is Inheritance tax as I would assume your mother would be gifting this amount - then were she to pass away within 7 years of making the payment - then all or some of it would need to be considered for Inheritance tax. Link here re gifts and the 7 year rules and what gets added back into the estate https://www.gov.uk/inheritance-tax/gifts

However if the value of her total assets are less than £325,000 then there will be NO Inheritance tax as her estate is below the NIL threshold.

The only other point I should raise is this - should the time come that she has to go into nursing care - then any application with assistance for care home fees would be refused on the basis that she deprived herself of capital - as she already nees 24 hour care - she would fall into this catagory

http://www.which.co.uk/elderly-care/financing-care/gifting-assets-and-property/343063-what-are-the-rules-for-gifting-assets

Let me know if I can assist further or if you wish me to expand on my answers

Thanks

Sam

Customer: replied 9 months ago.
Many thanks Sam, that is very useful
Expert:  Sam replied 9 months ago.

HI

You are very welcome

Do let me know if I can assist further - but if you could take the tie to rate the level of service I have provided (or click accept) it would be appreciated -

Thanks

Sam

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