Mum wants to sell up and move in with me
Discussion
My 83 year old mum, who appears to be as fit as a fiddle, wants to sell her house and live with me and my wife. We have planning permission to build an annexe and mum wants to contribute to the build and live in it. This is fine by us and on the surface appears to be a bonus. The value of mum's estate is under the IHT threshold but can she just give her money away to me and my sisters or do we incur some kind of tax? The other thing on my mind is about care home costs. What if after a few years she needs to go into care and doesn't have the money for it? I can't believe someone can just dump their money onto family members to avoid paying for care themselves. Am I walking into financial issues here?
Lord Flashheart said:
My 83 year old mum, who appears to be as fit as a fiddle, wants to sell her house and live with me and my wife. We have planning permission to build an annexe and mum wants to contribute to the build and live in it. This is fine by us and on the surface appears to be a bonus. The value of mum's estate is under the IHT threshold but can she just give her money away to me and my sisters or do we incur some kind of tax? The other thing on my mind is about care home costs. What if after a few years she needs to go into care and doesn't have the money for it? I can't believe someone can just dump their money onto family members to avoid paying for care themselves. Am I walking into financial issues here?
I don't know about the financial aspect, but think twice about moving her in. We moved in my grandmother (mother's side) under the arrangement you describe and it nearly drove us all nuts. My parents made me promise I wouldn't make the same mistake.Louis Balfour said:
Lord Flashheart said:
My 83 year old mum, who appears to be as fit as a fiddle, wants to sell her house and live with me and my wife. We have planning permission to build an annexe and mum wants to contribute to the build and live in it. This is fine by us and on the surface appears to be a bonus. The value of mum's estate is under the IHT threshold but can she just give her money away to me and my sisters or do we incur some kind of tax? The other thing on my mind is about care home costs. What if after a few years she needs to go into care and doesn't have the money for it? I can't believe someone can just dump their money onto family members to avoid paying for care themselves. Am I walking into financial issues here?
I don't know about the financial aspect, but think twice about moving her in. We moved in my grandmother (mother's side) under the arrangement you describe and it nearly drove us all nuts. My parents made me promise I wouldn't make the same mistake.Lord Flashheart said:
Louis Balfour said:
Lord Flashheart said:
My 83 year old mum, who appears to be as fit as a fiddle, wants to sell her house and live with me and my wife. We have planning permission to build an annexe and mum wants to contribute to the build and live in it. This is fine by us and on the surface appears to be a bonus. The value of mum's estate is under the IHT threshold but can she just give her money away to me and my sisters or do we incur some kind of tax? The other thing on my mind is about care home costs. What if after a few years she needs to go into care and doesn't have the money for it? I can't believe someone can just dump their money onto family members to avoid paying for care themselves. Am I walking into financial issues here?
I don't know about the financial aspect, but think twice about moving her in. We moved in my grandmother (mother's side) under the arrangement you describe and it nearly drove us all nuts. My parents made me promise I wouldn't make the same mistake.When she finally went, my parents rented her annexe to lodgers. Which we enjoyed even less!
Louis Balfour said:
Lord Flashheart said:
Louis Balfour said:
Lord Flashheart said:
My 83 year old mum, who appears to be as fit as a fiddle, wants to sell her house and live with me and my wife. We have planning permission to build an annexe and mum wants to contribute to the build and live in it. This is fine by us and on the surface appears to be a bonus. The value of mum's estate is under the IHT threshold but can she just give her money away to me and my sisters or do we incur some kind of tax? The other thing on my mind is about care home costs. What if after a few years she needs to go into care and doesn't have the money for it? I can't believe someone can just dump their money onto family members to avoid paying for care themselves. Am I walking into financial issues here?
I don't know about the financial aspect, but think twice about moving her in. We moved in my grandmother (mother's side) under the arrangement you describe and it nearly drove us all nuts. My parents made me promise I wouldn't make the same mistake.When she finally went, my parents rented her annexe to lodgers. Which we enjoyed even less!
Sounds like the constant care you needed when you were in your nappies plus the 9 months of walking around with you in her tummy plus all that accompanies.
Lord Flashheart said:
The other thing on my mind is about care home costs. What if after a few years she needs to go into care and doesn't have the money for it? I can't believe someone can just dump their money onto family members to avoid paying for care themselves. Am I walking into financial issues here?
You must investigate this further before making a decision. My mother is in a care home costing £69k pa. Although self-funding for now I’ve looked through the regulations and councils will go after any monies they can to reduce their commitment and what you are suggesting is likely to cause you problems. Even when a council contributes to a care home, in most cases they do not cover all the costs. I suggest you consult a specialist solicitor. I would urge you just to fully talk through the potential future . Elderly people can deteriorate quickly . Think of personal care , incontinence,help in the shower etc . You also rightly point out this financially may mean care homes are not possible. It is unfortunate that many elderly people especially women live long into old age often in various forms of decline. Careful what you take on.
Lord Flashheart said:
The other thing on my mind is about care home costs. What if after a few years she needs to go into care and doesn't have the money for it? I can't believe someone can just dump their money onto family members to avoid paying for care themselves. Am I walking into financial issues here?
Isn't it a potentially exempt transfer (PET) with the 7-year rule?Local authorities can check records to see if people have been disposing of assets in a way that seems designed to, er, dispose of assets. But even if that happens, it just means she - or you - pay more for the care. It's not a criminal offence.
Lord Flashheart said:
My 83 year old mum, who appears to be as fit as a fiddle, wants to sell her house and live with me and my wife. We have planning permission to build an annexe and mum wants to contribute to the build and live in it. This is fine by us and on the surface appears to be a bonus. The value of mum's estate is under the IHT threshold but can she just give her money away to me and my sisters or do we incur some kind of tax? The other thing on my mind is about care home costs. What if after a few years she needs to go into care and doesn't have the money for it? I can't believe someone can just dump their money onto family members to avoid paying for care themselves. Am I walking into financial issues here?
Not an accountant, so bear that in mind. She can gift you as much as she wants or has. Zero tax implications unless she dies within 7 years AND her estate is liable for IHT. Then the gift will be treated as a potentially exempt transfer for IHT purposes.
Local authorities - if you’re looking at a LA care option down the line - don’t play by quite the same rules. They will look at dispositions of cash differently when trying to wriggle out of having to pay. Best check on this as you may find yourself having to foot a care bill later.
And then there is the whole mum moving in with you, even if not completely in. Can get tricky.
clio007 said:
Louis Balfour said:
Lord Flashheart said:
Louis Balfour said:
Lord Flashheart said:
My 83 year old mum, who appears to be as fit as a fiddle, wants to sell her house and live with me and my wife. We have planning permission to build an annexe and mum wants to contribute to the build and live in it. This is fine by us and on the surface appears to be a bonus. The value of mum's estate is under the IHT threshold but can she just give her money away to me and my sisters or do we incur some kind of tax? The other thing on my mind is about care home costs. What if after a few years she needs to go into care and doesn't have the money for it? I can't believe someone can just dump their money onto family members to avoid paying for care themselves. Am I walking into financial issues here?
I don't know about the financial aspect, but think twice about moving her in. We moved in my grandmother (mother's side) under the arrangement you describe and it nearly drove us all nuts. My parents made me promise I wouldn't make the same mistake.When she finally went, my parents rented her annexe to lodgers. Which we enjoyed even less!
Sounds like the constant care you needed when you were in your nappies plus the 9 months of walking around with you in her tummy plus all that accompanies.
BlackWidow13 said:
Lord Flashheart said:
My 83 year old mum, who appears to be as fit as a fiddle, wants to sell her house and live with me and my wife. We have planning permission to build an annexe and mum wants to contribute to the build and live in it. This is fine by us and on the surface appears to be a bonus. The value of mum's estate is under the IHT threshold but can she just give her money away to me and my sisters or do we incur some kind of tax? The other thing on my mind is about care home costs. What if after a few years she needs to go into care and doesn't have the money for it? I can't believe someone can just dump their money onto family members to avoid paying for care themselves. Am I walking into financial issues here?
Not an accountant, so bear that in mind. She can gift you as much as she wants or has. Zero tax implications unless she dies within 7 years AND her estate is liable for IHT. Then the gift will be treated as a potentially exempt transfer for IHT purposes.
Abdul Abulbul Amir said:
As she is moving in to the newly built annex make sure it clears the gifts with reservation rules.
OP did say "The value of mum's estate is under the IHT threshold".However, IHT thresholds (and the value of mum's estate) and go up and down, so it may not always be that way.
Getting mum to pay market rent for the annexe could dodge that, and shouldn't be considered 'notional capital' for care means testing?
Realistically, if she owns her own home, she will have too much capital to receive any help with care costs. https://www.moneyhelper.org.uk/en/family-and-care/...
Jon39 said:
Long ago I read a report about this happening.
Something occured to the younger generation, possibly divorce, and the elder resident was left homeless.
Louis Balfour said:
To give you an example of one of the many challenges. She fell and hit her head, suffering a brain hemorrhage, that did not kill her. She became incontinent and needed constant care, which was provided by us. It wasn't very nice and probably not worth the money that was saved.
Just to add a 'plus one' to the above.My uncle and his wife moved her mother in when she was well. It was fine at first but she started having weird behaviors. Soon became full dementia, she was basically constantly agitated and trying to escape from them, constantly calling the police saying she was being held prisoner, fighting them etc. It progressed eventually to the point her personality had completely gone and she was s
tting herself regularly etc. His wife gave up work to care for her. It was constant worry and they couldn't ever go on holiday to get a break from it. It basically ended up destroying their lives for about 5 years.
Lord Flashheart said:
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We have planning permission to build an annexe and mum wants to contribute to the build and live in it.
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If your Mum is still quite independent, it would likely be a good idea for the annexe to be equipped with a kitchen etc.We have planning permission to build an annexe and mum wants to contribute to the build and live in it.
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This way she can retain her independence, and it will also keep her out of your kitchen, which in many cases can be an issue for some women.
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