Relocate DM close to me but no idea how

[zeddybrek]

DF passed away last year and my mum has no one in the area anymore. She is about an hour's drive away. She doesn't drive. I have 2 kids and FT job, she prefers my area. She has reluctantly agreed to sell her home and move to a flat closer to me. Reluctantly because she has lived in the house for 38 years and it has a lot of memories of my dad for her. She also agrees a flat will be easier, she has been recently diagnosed with arthritis in her knees. Also lower cost of running the flat vs bigger home and this way I can keep an eye on her and help daily with small bits while she keeps her independence and has separate space. Her home has no mortgage.

I am feeling overwhelmed and no idea how to move her. She will need me to get a mortgage as her house won't pay for the flat outright. I can afford it and absolutely want to do this for my mum. Does she sell the house and jointly buy with me, and I am the guarantor? Or can she gift me the money and then it's all in my name (her suggestion) but then tax implications on a significant cash gift to me.

Any suggestions or tips will be greatly appreciated, thank you.

Look for assisted living properties ideally one with a care home on site but if she is retired she isn’t going to get a mortgage from anyone.

I think those assissted living flats are very difficult to sell on, so watch out for that.

How old is she? Are you really willing and able to take on a new mortgage?

How old is your mum?

It generally isn’t a good idea
she will loose all her social contacts

I think the easiest thing to do would be to speak to an estate agent or mortgage advisor about this. How old is your mum?

Yes just sell the house and then buy together - you can ring fence and if the property so 70/30 or whatever split - just use the same solicitor.

How old is she? How's her health, mental capacity and independence apart from the arthritis? That affects what you'd want to do financially and in terms of long term living plans.

I think you'd want to co-own the flat with her as tenants in common with you paying the mortgage and keeping the equivalent share of the flat eventually, so that if she does have to go into a care home your share is clearly ring-fenced. Unless you live in Knightsbridge it's unlikely that there will be any inheritance tax implications: your mother's IHT allowance will be up to a million pounds.

Can you rent out her property and use the income to rent a warden assisted flat near you?

I agree with renting out her current home and see if that will more then cover renting a flat near you.

You pay tax on all rental income- there is then an allowance but you cant offset many costs

You will pay 2nd home stamp duty if you jointly buy
Deprivation of assets needs to be considered as well if she needs to have care.

See and Independent Financial Advisor with specialism in this area as soon as you can. They will talk you through all your options.

Thank you everyone for the helpful advice. My mum gets her pension end of next year, she's very fit and active and will have a better social life nearer me , long story, for example one reason is all her friends have slowly moved out of her area. She is quite alone which makes me so sad. I can't rent out her house as then I'll have tenants to manage and additi income to think about for tax returns either me or my mum and mentally we'd both like a complete break from the area. Co-owning a flat seems like the best option to explore, and I will get legal and tax advice as to how to go about this.

This was a really difficult post to write so a big thank you again everyone.

If she gives you money, two things:

Should she need care, at home or in a care home, LA will treat the money as if it was still hers and available to her as part of her savings, even though it’s tied up in the flat and not accessible - this is what’s meant by deprivation of assets.
Secondly, since she’s making use of the flat, the gift will be for tax purposes a “gift with reservation of benefit” and will remain part of her estate. No tax implications until she dies, and if her estate is less than the IHT allowance (currently £325000) there won’t be any tax. Otherwise, tax on anything above the allowance is 40%.

Tax advice you’ll need an accountant. Legal advice - there is an association of solicitors with special expertise in care of elderly, see if you can find one of these.

How old is your mum? Realistically how long is she likely to be in the flat? Personally I would avoid buying an assisted living flat purely due to the problems selling and continuing to incur high service charges until you do. E.g. 80% of the flats for sale within 5 miles of my mum are in 1 assisted living complex!
My friend had the nightmare situation where her mum had to go into a care home, self funded as she owned her flat and it took nearly 3 years to complete the sale. Purchasors were either put off by the service charge or died/had a health crisis mid purchase and pulled out. They eventually sold for less than the initial purchase price in a healthy property market and that is not uncommon.
If rented assisted living is available that is likely to be easier for you if you aren't set on retaining the capital in her property. But it isn't available everywhere.
If you do buy a non-assisted living flat go for ground floor so there are no issues with stairs/lift maintenance. Also think about parking for visitors/future care needs.
But speak to an expert about financing it or you could make an expensive mistake.

And proximity to GP/shops/public transport/ any social interests is important.