Thanks for your reply, as I posted to the conmankiller I am really glad that I registered as the information I have received has been first class and I thank you for your reply. Just to confirm,I bought my mums property in April 05 so I guess that I fall into the 5 year catagory which is a shame but at least I know. Once again thanks very much. 

thanks for your response, I am really glad that I registered as the information I have received has been excellent and I would not hesitate to use the site in the future for any further help, once again thanks very much, will let you know the outcome.

Gino, good postings from conmankiller. Just going back to the clawback of discount if the property is sold too quickly, 18 January 2005 is important. If bought before this date then the clawback is proportional over 3 years, if afterwards its over a 5 year period. Although the solicitor would pick this up its advisable for you to check the paperwork you have from the council at the time of the purchase.

Good luck with this

Chris 

 

 

 

Hi -- You are most welcome -- Another thing to prevent any comeback in later life from the IR, is to draw up a lifelong tenancy agreement that gives your Mum the right to live there until the end of her life, totally rent free. That would cover you if the IR wrongly assumed that you have been receiving rent for it, and also give your Mum protection of tenure.

The fact she is in good health and cannot reasonably foresee the needs for residential care at this moment goes in her favour, the rules on, "deprivation of assets" cannot be applied if she makes the transfer at this time. --- Good on her ---- my Dad got stung because he was too late making decisions, therefore the authorities have plundered his bank accounts and stripped his assets to pay for his care.

Thank you. Her estate is less than 300k so no inheritance tax to pay. I can see now what tax I will have to pay however thats only if I sell it. Thanks again.

Hi --- Inheritance tax is not an issue as long as her total estate falls below £300k, at the date of death so forget that if that's the case.

Capital gains tax will be due if she transfers the house to your ownership as you don't live there, but this would only become due when you sell it in the future. It would be payable on the price difference between what you acquire it at and the price you sell it for in the future. i.e. worth £100k now = sold for £150k in three years then  = £50k would be liable for CGT upon sale which will be 18% after April 2008.

You are allowed at the moment £9200 CGT allowance in a tax year, before you have to pay any CGT so you could deduct this from the £50k gain, although the above sum is only an example.

 

 

 

Thank you for replying, its worth approx £100k. My mother lives alone. Thanks once again

Hi - Gino --- How much is the house worth at this moment and who actually resides in your Mother's house ?

I can't answer the discount bit of your question, but I can tell you what the tax situation would be.

 

Thanks for your reply, thats great I think thats a good idea and I will deal with this however there is another reason why my mum has discussed this with me. She is quite clever in her own way and she discussed with me the consequences of her having to go into a nursing home and what implications this would have. Her sister went through the same problem and the family used the sale of her  home to pay for the nursing home fees, She does not want that to happen to me even though her health is really good at present but I can see that she is covering all bases. And for this reason she is pushing me to transfer the house to my name. I wondered the tax implication around this topic.Any advice.

Gino, it sounds like your mum's worried and has come up with her own solution which is not a particularly good one. Has she made a will, because if not a meeting with a solicitor or qualified will writer should put her mind at rest and solve the problem relatively cheaply.

This is my first attempt on sites such as these to find an answer to to the above subject. I bought my mums council house for her 2 and a half years ago as she could not afford the payments as my dad who use to be the main earner died and left little provision for her.She has now asked me if I would take ownership of the property which I never wanted to.I guess she is thinking this was to ensure that I receive the house while she is alive as she is concerned that her other children will want part of it. My concern is the tax implication on taking this course of action and of course when I bought the property for my mum she also had a discount from the local authority. My understanding on that was she had to wait three years before she could transfer anyway otherwise she would loose part  or all of her discount as she had lived in the property for the last 50 years.Please can you help me. Thanks.