I am paying for a house for my parents to live in, but the house cannot be in my name as it can only be sold to someone over the age of 55.

I was wondering if my solicitor can lodge a charge in favour of myself with the land registry and this would be paid to me as a secured loan when the property is sold? If so, is it possible to lodge a charge greater than the current property price to ensure I get some return on the money invested?

Many thanks.

It should be possible to register a charge in your name - ask your solicitor to draw up the necessary paperwork. You could put a clause in that you are due interest on the initial amount so that you get a return or link it to some house prices index.

Many thanks for your reply. Do you know if I will be liable to pay income tax on the interest or indexation uplift? Also, should my parents need to go into nursing homes, would my charge be paid before the local health authority from the proceeds of sale?

If my parents sold the house to me when I am 55 for the charge value (assuming I don't charge interest or index it), would I be liable for CGT at that time for the difference between the market value of the property and the charge, or does CGT only become payable when I sell the property?

Thanks!

I don't think income tax is applicable if anything it would be a capital gain I would have thought. You'd need a decent tax accountant to give you a definitive answer on that one.

No idea about the nursing home question but if they had a mortgage over the property then that would be registered as a charge and repaid so I can't see why yours wouldn't be - the length of time between buying and having to sell might be important though ie. if it is soon after the event then it may look like a scam to get round the rules.

CGT only becomes payable when you sell something so if your parents sold to you you would acquire the asset at the market value at that point and CGT would start from that point. It would be better for tax purposes to leave the property in their names and crystalise the charge when they sell it (or it becomes part of their estate).