Rental question

[Merlincat07]

Hi I'm not sure if this is quite the right place to post and happy to get it moved if it's not.

I'm posting for some expert advice. I currently live over an hour away from the town I was born in. I rent privately with my husband and our two children.

My grandmother has recently moved into a care home and her house is standing empty. We would love to move back and put an idea to my mum and uncle to suggest we could rent the house and provide two benefits: firstly we would be looking after the property and secondly the rent we pay could go straight towards care home bills.

Can anyone advice if there are any tax implications my mum/uncle/grandmother would need to be aware of?

Many thanks in advance for any advice.

There is theoretically no such thing as an informal rental.

So in theory you would need a rental agreement and your grandmother or her agent would need to ensure the house was legally suitable for rental: gas safety certificate, electrics, legionnaires test etc. Insurance company would need to be notified that the house was rented out. Rental income would be taxable, so your grandmother or her legal representatives would need to fill in a self assessment form.

If you were just to move into the house and pay any rent in cash, your mother and uncle risk creating an illegal tenancy. They would be legally liable were something to go wrong (eg one of you gets electrocuted) . They would also find it very difficult to evict you were you to decide to stay in the property and not pay any further rent. If your marriage were to break up or you died, your husband would also have rights and they would find it difficult to evict him. This may all seem unlikely but these scenarios do arise.

Has your grandmother left the property to your mother and uncle in her will? Are there any other potential heirs? Depending on her finances, if she stays in a care home for a long period of time and cannot meet all the fees, the local authority may have a claim on the property.

Thank you so much for taking the time to reply with all of that. Really useful information and very, very helpful.

Have you all thought about grandma executing a power of attorney if she has capacity still? It will make it easier to deal with her affairs even if you do not proceed.