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Legal matters

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Original poster

Parents to sign over their home to me

26 replies

mumof22004 · 01/01/2018 18:22

My parents need to move as their home is no longer suitable for their needs.
We have been discussing different options for 3-4 months now since my Mum had a stroke.
Their house has a huge amount of disrepair. My mum can no longer go up the stairs so will be sleeping downstairs.
We have spoken about them living in an extension off my house. They are very keen on this idea as are my family. It will be separate living.
I am a community support worker and I am happy and able to give up some of my hours to be there for them and fulfil their needs as they change.
The extension has planning permission already and the plans have been adjusted to make it all accessible for my parents now and as they get older.
My dad and I have had their property valued and it was priced at £100k.
The extension would be a cost of around 65-70k.
In order for us to fund the extension we would be possibly looking at a bridging loan and then when the house sells we can pay off the bridging loan.

Can anyone tell me the legality of this situation please?
Regarding tax.
This is all new to me and I have no idea who I should speak with?
Should I see a solicitor or a financial advisor?
Would there be fees for an initial appointment with either of these.
Any advice welcome.
Many thanks.
Smile

OP posts:
expatinscotland · 01/01/2018 18:25

You need to see a solicitor. Ring round, fees can vary, no one's going ot be able to tell you what it will cost. There's a lot of 'they give you a free half hour' but no one is beholden to extend this. It doesn't make much sense to do an extension when the house is in such a bad state of disrepair, though.

Original poster
mumof22004 · 01/01/2018 18:43

It's an extension off my own house. Not their house. Smile

OP posts:
mayhew · 01/01/2018 19:17

Can't they sell the house themselves and pay for your extension? Obviously you would help them manage the sale and then they give you money for the cost of the extension plus the interest cost of the loan?

Viviennemary · 01/01/2018 19:22

What Mayhew suggests is certainly the most straightforward idea. And then there would be no need for a bridging loan to pay for the extension. But I suppose it's the time delay between them selling their house and your extension being ready. I certainly would see a solicitor before you start things.

Original poster
mumof22004 · 01/01/2018 19:32

That's right yes. They wouldn't have anywhere to live while the extension is being built 😕

OP posts:
BubblesBuddy · 01/01/2018 22:02

Can you not take out an interest only mortgage and then pay it off when your parents sell their house? I would have thought this may be cheaper then a bridging loan as long as there are no extortionate fees involved and you can pay it off early.

There is no inheritance tax liability if their total estate is below the threshold for tax and they can therefore gift money to you without an IHT issue.

If they need a care Home, have they deliberately given their main asset to you to avoid fees? This could be a question so that needs to be looked into by a solicitor. Will they have a financial interest in your house or is the money being given? You will need to decide this and get a legal agreement drawn up.

Will any other children be deprived of an inheritance with this arrangement? If so, how will this be sorted out?

This arrangement is not short of questions so you need to think about everything and get a legal agreement between the parties involved.

Original poster
mumof22004 · 01/01/2018 22:15

Ok I understand what you're saying. I have a brother but he has no contact with them and hasn't done for years.
With regard to a nursing home I would do everything in my power to ensure they won't have to go into a home.
I will look into seeing a solicitor with my dad as Mum still in rehab.
Thank you very much

OP posts:
lynmilne65 · 02/01/2018 08:09

Who mentioned Care Home? don't you people read ??

lynmilne65 · 02/01/2018 08:10

Well done I say having been in business for ever !!

Original poster
mumof22004 · 02/01/2018 12:10

Lyn I'm not sure what you mean 😬

OP posts:
RaininSummer · 02/01/2018 12:31

Lyn, a care home, sadly, could still turn out to be a future need couldn't it so there is no need to be so abrupt.

PositivelyPERF · 02/01/2018 12:35

Be careful, OP. I don't know much about the legalities but I would be concerned that your brother will turn up when your parents eventually pass away. You will need to make sure they have a will stipulating what they want to leave you.

saladdays66 · 02/01/2018 12:41

I don’t think you mean a bridging loan - they tend to be for a matter of days at huge interest rates. Sounds like you need proper financial advice.

Ask your friends if they can recommend a financial advisor.

Sounds like if your parents sell their house, then you can spend the money on having the alterations done.

Could you borrow more on the mortgage against the future increased value of the house?

And I think your parents will need to make a will saying what they’d like to happen to their estate.

Farahilda · 02/01/2018 12:45

"Who mentioned Care Home? don't you people read ??"

A previous poster mentioned a care home, because it is highly relevant. The proceeds from the sale of a house funding the next stage of where the residents live is one thing. Giving them to form an asset for one of their children and making them unable to pay care home fees (should they be needed) would be viewed very diffently and that is why the recommendation to see a solicitor (and IFA) is necessary.

Major gifts to children can and will be scrutinised if care home admission is needed, and if it is considered deprivation of assets then for tax/fees purposes it will be as if the gift never happened. What this can mean depends on the individual circumstances.

Hotpinkangel19 · 02/01/2018 12:57

You need to look into deprivation of assets as other posters previously mentioned. It can be seen that since the stroke your parents are trying to avoid paying for care home fees if needed, this can be a massive problem.

mumblechum0 · 02/01/2018 13:00

In addition to the GROB (Gift with Reservation of Benefits) aspect, your parents are potentially putting themselves in a very vulnerable position by moving into an annexe of your house which of course is in your and your husband's names. If you two split up, or fell out with your parents, they'd be essentially homeless.

This needs independent legal and financial advice for both sides.

Original poster
mumof22004 · 02/01/2018 13:58

Thank you everyone. Thanks

OP posts:
Original poster
mumof22004 · 18/01/2018 17:31

Ok so we have decided to sell parents property. They will go in to rented paid for with my dads funeral fund.
We will have the extension built within 6 months and then they can move in.

I have sorted a solicitor for the sale of the house.
A financial advisor said I don't need to speak with them.

They will gift the money from the sale of their house to build our extension.
I just need legal advice for all the what ifs.

Does this all sound about right?

OP posts:
JaniceBattersby · 18/01/2018 23:16

I’m not sure on the legal side of this but I do know about building?

Do you have planning permission (if it doesn’t come under permitted development) and a builder ready to start? The building trade is incredibly busy at the moment and round here you’re looking at a year or more to wait for a decent firm to put up an extension. Just wanted to warn you in case the rented accommodation was time sensitive.

Good luck with it all OP Smile

Original poster
mumof22004 · 18/01/2018 23:44

We have three builders who are putting together prices.
We have planning permission also which we obtained a year ago.
Thanks for your advice and luck Wink

OP posts:
retirednow · 21/01/2018 19:57

Its very kind of you to be doing this for your parents, but have they made a will leaving money to your brother which you could end up having to pay him.

Original poster
mumof22004 · 21/01/2018 21:17

No they won't leave him anything.
He isn't a good sort. He had his children taken into care. He isn't nice so we stay away.
And thank you 😊

OP posts:
retirednow · 21/01/2018 21:49

You may be able to apply for improvement grants if it's for your elderly parents, not definitely sure but worth looking at gov.uk site. Also look into claiming attendance allowance for them and carers allowance for yourself. Smile

lougle · 21/01/2018 21:57

I think you still need to investigate deprivation of assets carefully. If your parents are selling their assets (their property) and then gifting you the money to extend your home (as in, not gaining a beneficial interest in it themselves), even if they will then live there rent free, the problem comes if it becomes an unsuitable home for one or both of them.

You can say that you don't intend for them to go into care, but the Local Authority may assess that as the only viable option, given their needs, in the future. If they were still home owners, they could levy the fees against the value of their home. By selling their home and giving you their money, they have deprived themselves of the money, and by extension, prevented the Local Authority being able to levy the fee against their assets. That is not allowed.

Original poster
mumof22004 · 21/01/2018 23:12

Yes I am going to see a solicitor as this is something I am concerned about. They are intentionally making themselves homeless and giving away their assets. We need to all be protected. Thanks for advice.
Yes my dad has just been awarded attendance allowance. Mum can't claim yet as it needs to be 6 months of need before she can. I'm going to claim carers allowance now

OP posts:
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