Swapping house with my mum?

[mummyofhyperDD]

Does anyone have any experience of this? We both own our houses without mortgages. My house is ideal for someone with limited mobility - downstairs en-suite.
Mum doesn't have the cash free to adapt her home and she likes mine - both very nearby so she wouldn't be isolated. Changing ownership isn't an option as mums house is more expensive than mine and I need to consider my siblings future inheritance.
Is it a case of just swapping our electoral roll, council tax, utilities- or is something more required? We wouldn't pay rent to each other..

It sounds such an obvious solution!

One issue though is that if in future you sold your house you would have to pay Capital Gains Tax on it for any increase in its value while it was not your primary residence.

That is my understanding, but you would need to check with someone qualified.

You might need to tell your buildings insurance provider, too.

My understanding is that you can declare wherever you are actually living as your primary residence for the capital gains tax purposes

Capital gains tax applies to homes you own only, so this applies if you own more than one property but not to living in another's home.

OP you'll probably find both you and your mother's estate will need to pay capital gains tax on the increase in property value while you don't live there. There are some exemptions. It would be worth getting advice on this.

If either of you get UC or other benefits it may effect your claim. Once you move out your house is usually considered an asset and counts in the asset test. There are some short term exemptions to this.

If you have children it could affect their school application. My LA considers you to be living at a property you own even if you rent/live in another property elsewhere. So the school place would depend on distance to your owned house not to your mum's.

Thank you for the replies. I had not considered capital gains tax - that could be a big payment if this arrangement lasted for (hopefully) many years.

I also had not considered the benefits angle - mother is elderly and whilst she hasn't discussed this with me (she's very private) she definitely gets a state pension and has a blue badge for parking.

It's just such an obvious solution and when I bought my house I know she was already thinking we could swap in the future if necessary as she was very keen on the downstairs en-suite in the house I ended up buying..

Thank you - school places/ catchment isn't something we need to consider thankfully

State pension shouldn't be effected, this lists which benefits are means tested and which aren't. State pension falls in the not means tested category, other benefits she receives might be.
https://www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/how-your-benefits-are-means-tested/

Firstly you need legal advice. I would also expect a legal agreement considering all “what ifs”.

One option is that you do a formal transfer of ownership so your Mum owns 100% of your home but you jointly own her property as tenants in common. The % ownership would be based on current value. So your home is £300k and hers is £500k you own 60%.

The legal agreement would see you have a life time interest etc. in your Mum’s 40%.

It does mean your mum owns 2 properties which has implications. You also need to cover in the legal agreement who pays for maintenance, if over a period of time you can buy more of your home etc.

The other option may be to swap ownership formally but your Mum has a charge against your property for the difference in value. So in the example a charge of £200k. Questions to consider are interest etc.

It’s not straightforward but the cost of legal advice would set out the pros and cons. You also need to get input from your siblings as there is an impact on them.

Thanks for all the comments, particularly
@Harassedevictee

Would swopping the property ownership formally but your mum's will is changed to reflect the money you are essentially getting early work out? I would talk to your siblings and see if they would be in favour, I know my brothers wouldn't have an issue in similar circumstances but we are relaxed about money