Buying flat with elderly parent - IHT

[Mumofboys2006]

We would contribute half (probably via a mortgage) and my mother the remainder. As she’s in her mid-80s we are concerned the gifting rules may not apply.
How else can we minimise IHT?
My son (18) will be living in the property. Would it make a difference if she held her share of it on trust for him? Or if he just held the property with her as joint tenants instead of us?

What is the IHT problem that you are trying to solve?

Is this going to be her primary residence or does she live somewhere else?

Basically if she dies then the value of her half of the flat forms part of her estate for IHT purposes. It doesn't matter whether you or your son have the other half. However, that would still be the case if her estate were held as cash (i.e she didn't buy the flat). The question seems to be, will her estate have enough cash to pay the IHT payable on her non cash assets and avoid the flat potentially having to be sold to pay the IHT due.

I'm hoping to buy a flat for my son and the advice I received from financial advisor was to buy it in my son's name. Essentially, my son is the purchaser and I am the funder, via mortgage and savings. This means in the future the property won't form part of my estate, as it will be my son's property, not mine. There will be a charge on the property basically so my son can't sell it and run away with the proceeds, leaving me paying a mortgage for thin air!

However, I'm in my 50s, in good health, so wouldn't be seen as deprivation of assets and that may be something your mother needs to think about. In addition, I am the only funder, whereas you'd be acting together, so more complicated.

You need to get financial and legal advice so you can explore the various options for whatever it is you want to achieve. My aim is basically to provide my son with secure housing, to pay towards a purchase rather than a rental (I currently pay half his rent) and to move assets from me to him sooner rather than on my death.

Depends on the size of her estate.

Never married.
Over 500k then you'll have the taper relief, and 7 year rule.

Under its not a problem.

Married/widowed
Depends on how her estate is structured, but her and her spouses IHT allowances are combined. Which again may mean there's no problem.

Labour may change iht though....

Trusts can be used, but if she ever needs care then giving funds away maybe seen as deliberate asset depravation.

However, a tax adviser is what you need!

Be careful @Mumofboys2006 - if your mother goes into care (and your son doesn't have a disability), the council could force you to sell the flat if your mother doesn't have the necessary non property assets to pay for her care (which can be as high as £1500-2500 a week).