Buying Father's House Advice

RockLobster · 20 Aug 2008 at 23:45

Hi All

Living with my father at the moment when I say father he is like a mate. Get on great, always have. Anyway I'm seriously considering buying his house. There's two people in the will me and my sister. For examples sake let's say the house is worth 100k I was thinking of splitting it three ways (30k father, 30k sister and me). My mortgage would be say 60k but I have a fair amount of savings so it would probably be half that.

If my father needed nursing care in the future would it be classed as 'deprivation of assets'? Would the local authority be able to demand the money from the house he sold to me?

Hades · 21 Aug 2008 at 00:01

If he dies within 7 years you will have to pay inheritance tax. Sorry I know that doesn't answer your specific question.

RockLobster · 21 Aug 2008 at 00:02

Hades said:
If he dies within 7 years you will have to pay inheritance tax. Sorry I know that doesn't answer your specific question.

Inheritance tax isn't the threshold 250k? Because his assets are not worth that.

Rotty · 21 Aug 2008 at 00:07

not sure re the nursing home stuff but I did similar

if it is not your primary residence then you want to buy at a ( realistic ) high price to minimize any future capital gains tax

however prior to completion you will need to find the full sale amount ( the other £30k from somewhere as well as the mortgage advance ) before the completion date

Raymond Lin · 21 Aug 2008 at 00:10

RockLobster said:
Inheritance tax isn't the threshold 250k? Because his assets are not worth that.

PET, there is also a sliding scale, the longer he lives, he less he pays.

Reasteh · 21 Aug 2008 at 00:14

cant you just give someone a house i.e before you die, or do you have to sell it them or what :/

RockLobster · 21 Aug 2008 at 00:16

Rotty said:
not sure re the nursing home stuff but I did similar

if it is not your primary residence then you want to buy at a ( realistic ) high price to minimize any future capital gains tax

however prior to completion you will need to find the full sale amount ( the other £30k from somewhere as well as the mortgage advance ) before the completion date

It is my primary residence so I don't have to worry about capital gains tax. If I had 30k my share, put in 30k cash myself and got 30k as a mortgage I could pay it off in 5 years.

Raymond Lin · 21 Aug 2008 at 00:17

Reasteh said:
cant you just give someone a house i.e before you die, or do you have to sell it them or what :/

If you give it to them in your will then it'll be subject to IHT (subject to the size of the estate), if you give it under a PET and a life time gift, it can be tax free if the "giver" lives for 7 years after giving the gift and avoid IHT.

RockLobster · 21 Aug 2008 at 00:18

Reasteh said:
cant you just give someone a house i.e before you die, or do you have to sell it them or what :/

I don't think so. I'm still unsure about all this nursing care stuff. For e.g. a parent of yours if they had 50k in the bank and they knew they were going into a home they couldn't just give you 30k because your local authority would be up in arms. Unless you lived in Scotland. It is a friggin maze. :eek: