Purchasing Mothers Council House
Discussion
kev1974 said:
Don't forget, if as you say the plan is to leave the house in your Mother's ownership until the day she dies - you'll have inheritance tax to pay on it.
Only if Mum's total assets are over the IHT threshold. Given that OP's mum doesn't have sufficient money to buy the house herself I'd be surprised if IHT became an issue.Countdown said:
Only if Mum's total assets are over the IHT threshold. Given that OP's mum doesn't have sufficient money to buy the house herself I'd be surprised if IHT became an issue.
Yeah but he's saying he is going to give her enough money - as a pure gift - to buy the house herself. Believe the threshold for IHT is currently £315k so to do what he says he wants, the house plus everything else she owns or has in the bank needs to be below that level.tighnamara said:
I am providing my mother with the funds to purchase the house and want to ensure I have the money that I provided her returned, absolutely no difference from any other of the thousands who have borrowed money from Halifax, RBS, Barclays etc. and paid off the loan.
Actually there is a big difference: Halifax, RBS etc all charge a significant interest rate for their loans. 
as has been mentioned by some that actually read your post and responded to the questions (rather than go on a crusade against greedy children!) the best way is to get the solicitor to draw up a loan agreement and apply a charge on the property in your favour as would any other bank. you could either charge the interest monthly or roll it up like an equity release scheme.
in the event of the eventual sale whether due to downsizing, health issues or your mother's eventual passing the amount you have 'loaned' would be owed to you or your estate (you might croak first and it would only be fair to protect your immediate family). the worst case is that your mother needs care and the sale is forced by the local authority; without the agreement you'd have to challenge them to establish the debt to you.
I can fully understand your mothers predicament as my grandmother approached me soon after my grandfathers death with similar fears. sorting out a similar deal for her gave her peace of mind which in this day and age is good for their health compared to added worry of council pressure to move; however real or not.When the elderly get this in their head you can't stop them, perhaps the Daily Mail should be banned from the senior crowd for inciting fear/anger/irrational hatred of everything!
in the event of the eventual sale whether due to downsizing, health issues or your mother's eventual passing the amount you have 'loaned' would be owed to you or your estate (you might croak first and it would only be fair to protect your immediate family). the worst case is that your mother needs care and the sale is forced by the local authority; without the agreement you'd have to challenge them to establish the debt to you.
I can fully understand your mothers predicament as my grandmother approached me soon after my grandfathers death with similar fears. sorting out a similar deal for her gave her peace of mind which in this day and age is good for their health compared to added worry of council pressure to move; however real or not.When the elderly get this in their head you can't stop them, perhaps the Daily Mail should be banned from the senior crowd for inciting fear/anger/irrational hatred of everything!
Just an update to advise that all smiles in mothers house, she has seen that the upgrade work to the house will benefit her and that she won't lose what she sees as her "family" home.( irrelevant if it is council or not it has still been her home for 30 plus years)
So one less council house going to as some put it "greedy" children and now will remain with the council all be it with one person staying in a 3 bedroom house.
Thanks again to all for the feedback (positive and negative) and advice.
Making money from the council house was never the plan, some should maybe think and read posts before flying into the rights and wrongs.
So one less council house going to as some put it "greedy" children and now will remain with the council all be it with one person staying in a 3 bedroom house.
Thanks again to all for the feedback (positive and negative) and advice.
Making money from the council house was never the plan, some should maybe think and read posts before flying into the rights and wrongs.
Interesting thread.....my mother purchased her council flat after my father died in March 2014 and the circumstances are very similar to Tighnamara's.
This right to buy has caused huge distress in my family as my brother sister and I were all named Executors and Trustees in my parents' DIY wills but Lasting Powers of Attorney -financial - had been set up behind my back a few months prior to my father passing away and all the transactions to do with the DIY will - probate etc and right to buy have been kept from me by both my brother and sister, they informed me they 'had it in hand' but in fact had already done it.
My mother still has control of her bank account but my sister has permission to take it over when necessary.
I was able to see the details of my late father's bank accounts by taking the relevant documents to the bank. From what I saw there wasn't enough for my mother to make a cash purchase of her flat, she's 91 years old and presumably was guided by my siblings, a wall of silence having descended where I was concerned.
As my father was so frail and immobile I'd been trying to persuade my mother to agree to move out of her third floor flat - no lift and stone stairs - into one of the sheltered bungalows below but my siblings would not get on board with this idea plus my mother couldn't face the upheaval of moving and downsizing.
The large discount would not have followed to the sheltered bungalow incidentally.
So now my mother is living alone in her flat with very poor eyesight and balance problems but trying to convince herself she's done the 'right thing'.
She told me yesterday that the value of the flat will be shared between the three of us when it's sold after her passing.
I asked her if she's made a new will since buying the flat but she told me the DIY will she made in the same fashion as my father's in 2013 is still the current will.
I'm concerned about the difference buying the flat may possibly make to the effectiveness of this will plus of course the implications should she need to go into care.
I've spoken to all the relevant agencies, the Council, Social Services, Citizens Advice etc and even her solicitor but they weren't concerned about the issues that concern me.
Being of 'sound mind' is the mantra quoted over and over again.
I think right to buy in situations such as these are completely wrong. My mother's welfare should have been paramount, not getting rid of a council flat and someone else possibly making a quick buck.
I think I need to take this 'current' DIY will to a solicitor and try and check things out.......I don't want to upset my Mum at her age as she seems to accept what has been done but I'm very worried indeed.
This right to buy has caused huge distress in my family as my brother sister and I were all named Executors and Trustees in my parents' DIY wills but Lasting Powers of Attorney -financial - had been set up behind my back a few months prior to my father passing away and all the transactions to do with the DIY will - probate etc and right to buy have been kept from me by both my brother and sister, they informed me they 'had it in hand' but in fact had already done it.
My mother still has control of her bank account but my sister has permission to take it over when necessary.
I was able to see the details of my late father's bank accounts by taking the relevant documents to the bank. From what I saw there wasn't enough for my mother to make a cash purchase of her flat, she's 91 years old and presumably was guided by my siblings, a wall of silence having descended where I was concerned.
As my father was so frail and immobile I'd been trying to persuade my mother to agree to move out of her third floor flat - no lift and stone stairs - into one of the sheltered bungalows below but my siblings would not get on board with this idea plus my mother couldn't face the upheaval of moving and downsizing.
The large discount would not have followed to the sheltered bungalow incidentally.
So now my mother is living alone in her flat with very poor eyesight and balance problems but trying to convince herself she's done the 'right thing'.
She told me yesterday that the value of the flat will be shared between the three of us when it's sold after her passing.
I asked her if she's made a new will since buying the flat but she told me the DIY will she made in the same fashion as my father's in 2013 is still the current will.
I'm concerned about the difference buying the flat may possibly make to the effectiveness of this will plus of course the implications should she need to go into care.
I've spoken to all the relevant agencies, the Council, Social Services, Citizens Advice etc and even her solicitor but they weren't concerned about the issues that concern me.
Being of 'sound mind' is the mantra quoted over and over again.
I think right to buy in situations such as these are completely wrong. My mother's welfare should have been paramount, not getting rid of a council flat and someone else possibly making a quick buck.
I think I need to take this 'current' DIY will to a solicitor and try and check things out.......I don't want to upset my Mum at her age as she seems to accept what has been done but I'm very worried indeed.
tighnamara said:
Is it as easy as giving her money to buy it, I presumed that the maximum gift you can give per year is £3000.
No problem with paying the rent but the council are planning on carrying out some major insulation work on the house that requires her to move out for 3 to 4 month. Will provide her with another house / flat in that time with excess furniture put in storage. House will require to be completely re decorated from top to bottom. The works they are planning seem a bit over the top.
So one she doesnt want all the hassle at her age and two she thinks that they wont allow her back to the house since she is now on her own. Tried to convince her but having none of it.
Trying to help her out so would give her the money to buy the house, she can live rent free and have some more money each month to herself and look at leaving the house to myself (if that is possible)
Plan to see a solictor in the next few days to see the best way forward.
You can gift as much as you want just if you die within 7years the receiver has to pay tax on the gift. No problem with paying the rent but the council are planning on carrying out some major insulation work on the house that requires her to move out for 3 to 4 month. Will provide her with another house / flat in that time with excess furniture put in storage. House will require to be completely re decorated from top to bottom. The works they are planning seem a bit over the top.
So one she doesnt want all the hassle at her age and two she thinks that they wont allow her back to the house since she is now on her own. Tried to convince her but having none of it.
Trying to help her out so would give her the money to buy the house, she can live rent free and have some more money each month to herself and look at leaving the house to myself (if that is possible)
Plan to see a solictor in the next few days to see the best way forward.
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