Buying a share of mum's house. Implications?

[PetraM]

My mum is getting on a bit and has exhausted most of her savings. She will shortly be totally reliant on her state pension and low income benefits.

I'm wondering about "efficient" ways to help her out.

Can I buy a part of her home? Say 5-10% at first, and then not charge her rent on my 5-10%?

I'm thinking this means if she eventually needs residential care, the council will be able to take their chunk from the property value, but they money I've "given" her to get by for now will come back when the property is eventually sold.

IHT is not an issue, the value of her home is well below the limit.

Anything I need to be aware of. I realise there's a potential for CGT.

[Alaric]

Can I buy a part of her home?

You might take a look at "Home Reversion Plans". I'm not saying they're value for money, but the general idea is that cash is released against the equity value of a house to be repaid eventually out of the estate. A lifetime mortgage is one approach where the interest is rolled up. Lifetime tenancy is another.

[Mike88]

If your mother has a lump sum her entitlement to Benefits will be affected. Will you have to pay stamp duty on each percentage purchase of the property? My guess is you will but I don't know the answer but it's worth looking in to.

[pochisoldi]

My mum is getting on a bit and has exhausted most of her savings. She will shortly be totally reliant on her state pension and low income benefits.

I'm wondering about "efficient" ways to help her out.

Can I buy a part of her home? Say 5-10% at first, and then not charge her rent on my 5-10%?

I'm thinking this means if she eventually needs residential care, the council will be able to take their chunk from the property value, but they money I've "given" her to get by for now will come back when the property is eventually sold.

IHT is not an issue, the value of her home is well below the limit.

Anything I need to be aware of. I realise there's a potential for CGT.

Give her a mortgage (lend money secured on the property ). Ownership of the house stays with your Mum and you don't get entangled with the stamp duty hike if you own an interest in another property. If you want, charge rolled up interest to maintain the value of the loaned cash (and reduce any potential IHT bill), and/or rely on inheriting the property to realise any further increase in value of the property.

For added flexibility make sure the charge states that the charge owner can make further advances, so that any subsequent lending forms part of the first charge (ahead of any subsequent charges which may be added - hint LA care fees) You'll need a solicitor to do this when drafting the mortgage deed.

/Pochisoldi

[jackdaww]

there could be implications for any siblings you may have .

[Lootman]

Will you have to pay stamp duty on each percentage purchase of the property? My guess is you will but I don't know the answer but it's worth looking in to.

I would have thought that if portions of the house are sold over time, and the value of each partial sale is within the 120K nil band, then stamp duty could be avoided.

Also I believe there is no stamp duty on gifts, so the transfer could be structured as annual gifts, with any cash transfers being handled as a separate transaction.

That said, since the house will presumably be inherited anyway, in that situation I'd probably just make cash gifts to the mother as and when she needs them. When in doubt, keep things simple.