mortgage for dependent relatives - tax implications

[Willow33]

My sister and I own the house our parents live in and share the mort payments. It is a mortgage for dependent relatives. My sis said she is struggling to afford to do this but dh and I can't afford to take on more.
My parents could afford to contribute to her half of the payments but my question is does their doing so have implications for tax at any stage?

Hi Willow,

Before anyone can assess the potential tax implications, is there a reason you and your sister own the house your parents live in?

Hi Princess, they were sitting tenants and the opportunity arose to buy their house but due to their ages, they wouldnt be able to get a mortgage.

Ah ok. I didn't know whether it was to avoid IHT, which you wouldn't be.

There's no income tax or CGT that would be payable. If the property is worth a lot of money and they are in the IHT bracket through savings there are definitely some tax implications.

Thanks Princess. The property is worth a lot and has gone up in value since we bought it. My parents I think would be contributing about £100 a month. They are both over 65 years+. Does that make a difference?

I think perhaps if they are claiming Housing Benefit to live in this house owned by you and your sister then there may be some implications. If it is only £100 a month then the money could be gifted to your sister and wouldn't need to be specifically for the repayment of the mortgage.

Yes, did they own the property before and sell it to you and your sister?

No they never owned it, they were renting it privately. They don't receive benefits.

So does that make a difference?