Thanks for your question - I see you requested a live phone call, but this was some time earlier today
I can proceed sending a written response OR would you still like to have a telephone consultation (which will incur an additional fee)
Let me know how you would like to proceed, as |I see you are now offline from the Just Answer site
First we have two issues to consider when your grandmother transferred the property to you and your brother on 2004 as
1) Was she is good health when she made this transfer
2) Did your grandmother pay you and your brother rent whilst she continued to benefit from a property that w sno longer legally hers
3) Was this property included in your grandmothers estate when she passed away
The next consideration is how her solicitor viewed her request to allow your mother to make full use of the property when it was no longer legally hers to make any request for - ask as we are not legal experts and whether there was a deed of variation carried out to take the property back into your grandmothers estate - as if not (although I have to be honest and advsie I think its unlikely a gift made before death can then be included in the will to change the legal terms) this is now legally your and your brothers and your mother has no legal right to this property, its rents or anything else to do with the property.
And the rental income it will generate will be treated as yours for tax purposes as the deeds are in you and your brother name, and you cannot let to your mother for a peppercorn rent who then sublets this is tax fraud !
And yes rental income would affect his benefit entitlements - (not child benefit) bu tax credits and any other state benefits that are means tested.
I look forward to responses
Thanks for your response
I should point out that she should have paid you rent - as she continued to benefit from a property that was no longer legally hers - so she should have paid pre owned asset tax OR rent
So this should have been looked at by the solicitor that handled the estate as to whetehre this property should have been treated as a reservation with benefit
This being the case - in law - the property SHOULD have been included in the estate for Inheritance tax purposes, however if the value of this property and all your grandmothers other assets totaled less than £325,000 (and this can be extended if granddad has passed away and had left all his estate to grandmother)
However - this does NOT alter the fact that you deemed to have legally owned this property from 2004 and only you and your brother are legally obliged to manage how you take this forward regardless of what the will said as this is irrelevant from a tax point of view, but again I do urge you and your brother to take legal advsie re the wills wishes and the position in law regarding the property - but I am sure this is disregarded as your grandmother has no control
over a property she no longer legally owned.
But I would also take legal advsie as it may be that matters with your mother are to become a little tricky if you dont have legal backing of the position and what you could or cannot do!
Finally as you and your brother own this you could potentially make an election splitting the difference to be other than 50:50 ownership - however - as benefits are involved I would not recommend this, as as much of a terrible nuisance it will be for your brother with benefit entitlement - take the half share rent that you each then must declare to HMRC and at least then what benefits he gets are with the open declaration of his half share of the rental income - which will be a long term income and guaranteed unlike benefits !
let me know if I can assist furtehr, but if you have all that you need - then it would be appreciated if you could rate me for the level of service I have provided - or click accept
Thanks for the response
That is such a shame she cannot accept the legal position. And I can see why a sale might be on the cards, and then on the plus side the benefits system are NOT so much interested in the lump sum of capital your brother will have but the income that is EARNED Off that capital (such as interest paid) but he just has to be careful not to spend it all - other than on debts or bills or the benefit office could argue deliberate deprivation of capital - but if he declares the receipt of it - and then declares the interest that he may earn from it - all will be reasonably safeguarded.
Though each strain of benefit varies, and sometimes capital in excess of £16,000 negates a claim (such as housing
benefit and help with council tax and Job seekers allowance or employment and support allowance)
Good luck and thanks for the rating!