Tax implications of helping parent buy a hiuse

[IndigoNZ1]

My Dad died recently and my Mum, my brother and I jointly inherited the house (in France). We have just sold it and my Mum now wants to buy a house in Scotland. Does anyone know what the tax implications would be if we put the house in our joint names? (she wouldn’t have enough money otherwise). Only my Mum will be living there. My brother will be living in the UK and I am abroad (non-resident for tax purposes).

I’ve told her to get specialist advice, especially as we’re not familiar with Scottish law, but she’s so desperate to move that she’s not thinking clearly and refuses to discuss it with me.

There’s also the issue of being forced to sell the house to pay for residential care (if needed).

My Dad worked hard for 40 years for this money so I want to make sure we don’t waste it unnecessarily.

I would welcome any advice/experiences you could share. Thanks!

Well if she's refusing to discuss things, you need to seek your own legal advice. Although I have to say if this is the situation, I wouldn't be keen to enter into a legal contract with your Mum.

Which area is she looking to buy ? This will give you a starting point to contact a local solicitor (Are they called this is Scotland?) so you can request a phone consultation.

I think you'd have to prove that the joint ownership wasn't intentional deprivation of assets, should she ever need to pay for her care.

Also - research the differences in being joint ownership and being tenants in common and decide which is best for your circumstances.

I think you'd have to prove that the joint ownership wasn't intentional deprivation of assets

I believe that in France, children are automatically entitled to a share of their deceased parent's estate - it can't all go to the surviving spouse.

OP - you're going to have to spend some money on a solicitor to get proper advice. You'll easily get led down the wrong path on here. It's a complex issue but doable.

You need legal advice from a solicitor that understands Scottish property law and inheritance. There is also the issue that you and your brother may then own 2 properties.

My gut instinct is if the house in France was £200k, your Mum inherited £100k and you and your brother £50k each. You want to help your mum buy a house in Scotland then you maybe able to buy it as tenants in common and have a deed of trust setting out you own 25%, DB 25% and Mum 50%. This has implications as it’s a 2nd property.

Alternatively your Mum could buy it in her name but you and DB each have a charge against the property I.e. like a private mortgage which can include interest e.g. BoE base rate.

I strongly advise each of you to get independent legal advice. I would also advise having a legal document setting out all the what ifs, e.g. Mum needs to go in nursing home, down size etc. but also what happens if you or your brother become unwell, disabled, die and need access to the money.

There’s also the issue of being forced to sell the house to pay for residential care (if needed). My Dad worked hard for 40 years for this money so I want to make sure we don’t waste it unnecessarily

But it won't be wasted if it's used to pay for care for your mum when she needs it.

Maybe you and your brother could use the money to buy a house outright. Any money left over could be invested and used if she needs it. Then you inherit what's left over when she dies.

Thanks everyone. The consensus seems to be that we need professional advice (which makes sense as it seems very complicated and we’re a bit overwhelmed). We’ll start looking into that

The difficulty you have is ensuring your inheritance and that of your brother remain intact. If you just give it all to your DM, without any agreement about what happens to your share at any point, it means you could lose this money if it goes in home fees.

There’s also the issue that your DM would not have sole control of the new property. She’s beholden to her DC. Any adviser to the elderly would say this is a bad idea. So for her protection, your share needs to be in lifetime trust I believe. If anyone needs the money sooner? Tough!

The better option is to see if dm can get a property with just her share. Where is she now? In France? It’s quite difficult to get your Dc involved with a house at this late stage. I might be wrong but she might also be expected to pay rent for the portion of the house she doesn’t own. It’s a second property for you and your brother, presumably, and this might be an issue for you. Plus if you don’t have a mortgage, you now would not be first time buyers.

Not sure everything above is correct but that’s what I would be asking a solicitor. Definitely get advice.