Housing Options
Discussion
My girlfriend is in the process of selling her house. She has a number of options and she keeps asking me questions about possible these. And most I just don't know the answers. Ultimately, she is going to have to get some professional advice.
As well as selling her house, her mother (in her late 70's) is also selling her house as it's a 1920's semi and the house/garden is getting just too much for her to look after following a stroke.
Once my girlfriends house sells she will have around £700k after the mortgage has been paid off (the mortgage is currently paid by her ex-husband, she is not in a position to get a mortgage). After the sale of her mother's house, there will be approximately £300k. My girlfriend is an only child so ultimately she would inherit 100% of the money from the sale of the house.
The latest options they're looking at are as follows:
1. They buy a house together. Ideally somewhere that has an annex or similar type arrangement where her mother could live. What would happen if her mother needed to go into residential care, would the house sale be forced to release her portion of the property? Could her mother gift her share to her daughter.
2. My girlfriend buys a house for £800k (for example). Ideally somewhere that has an annex or similar type arrangement where her mother could live. The remaining £200k in used to buy a flat outright where one of her children could live for a few years, paying a reduced amount of rent. Then my girlfriend could use this as her pension when the child has moved on. She would have to declare this as rental income and pay tax accordingly. How could the ownership be transferred to my girlfriend?
Thanks for any advice in advance.
As well as selling her house, her mother (in her late 70's) is also selling her house as it's a 1920's semi and the house/garden is getting just too much for her to look after following a stroke.
Once my girlfriends house sells she will have around £700k after the mortgage has been paid off (the mortgage is currently paid by her ex-husband, she is not in a position to get a mortgage). After the sale of her mother's house, there will be approximately £300k. My girlfriend is an only child so ultimately she would inherit 100% of the money from the sale of the house.
The latest options they're looking at are as follows:
1. They buy a house together. Ideally somewhere that has an annex or similar type arrangement where her mother could live. What would happen if her mother needed to go into residential care, would the house sale be forced to release her portion of the property? Could her mother gift her share to her daughter.
2. My girlfriend buys a house for £800k (for example). Ideally somewhere that has an annex or similar type arrangement where her mother could live. The remaining £200k in used to buy a flat outright where one of her children could live for a few years, paying a reduced amount of rent. Then my girlfriend could use this as her pension when the child has moved on. She would have to declare this as rental income and pay tax accordingly. How could the ownership be transferred to my girlfriend?
Thanks for any advice in advance.
I think there is a fair amount to think about here.
From a mother/daughter perspective I assume they are close and get on very well ? If not living together is unlikely to improve things
The other thing to think about if they live together is that your girlfriend will gradually morph into her Mother's carer and that will probably become more and more demanding as her Mother ages - is that what they both want ?
From a purely financial perspective if there are any inheritance tax concerns (don't know from what you have said plus I am not an expert) then it might be very sensible to pass on some of her wealth to her daughter now
Personally I think it might be a good time now to set up a power of attorney
Good luck
From a mother/daughter perspective I assume they are close and get on very well ? If not living together is unlikely to improve things
The other thing to think about if they live together is that your girlfriend will gradually morph into her Mother's carer and that will probably become more and more demanding as her Mother ages - is that what they both want ?
From a purely financial perspective if there are any inheritance tax concerns (don't know from what you have said plus I am not an expert) then it might be very sensible to pass on some of her wealth to her daughter now
Personally I think it might be a good time now to set up a power of attorney
Good luck
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