Buying grandparents home

[Ga101]

Hopefully someone can answer my question.

My Grandmother lives alone in her home which is valued at approx £160,000, she wishes to sell the house to me to avoid any inheritance tax and more importantly to avoid having to sell the family home to fund nursing care.

If i were to but the home she would still live there indefinately. As she is the owner of the property can she sell it to me greatly below the market rate? Would she have to pay rent?

In this situation could someone advise the best course of action with regards to this.

Thanks
Gary

[Arnold Aaro]

Before I can provide some answers, please tell me, does you grandmother have any other assets in addition to the home? If so what is their value?

Also, has she made any gifts in the last 7 years?

This will establish whether there will be any Inheritance Tax in the first place. Once we know, we can address the issues you have raised.


Arnold Aaron
Investment and Inheritance Tax Planner
Zurich Advice Network
e mail: arnold.aaron@zurichadvice.co.uk
Tel: (office) 0208 437 2500 (m) 07957 440 724

[Ga101]

My grandmother only has savings to the value of £50k, not other assets apart from the property.

No other gifts have been made.

[robertmlaws]

Selling the house to you (her son) while continuing to live in itis not generally a good idea.

Because she continues to live in it, the IHT liability is the same. It remains part of her estate even though she sold it to you. The IHT will be based on the value at they date of death.

becuase it is yours, but you don't live in it, you will get faced with a CGT bill when you sell it. The CGT will be based on the increase in value since you bought it and the value when you sell it.

the house can still be forcibly used to pay for her long term care even if she has sold it to you.

There are probably 'clever' ways of avoiding some tax, and there are plenty of peopl ehere to advise on them, but you might find that it is actually best to leave things exactly as they are.

Robert

[Arnold Aaro]

thanks Gary -

As your mother's estate is less than the £275k Nil rate band, there is no IHT based on the figures you have supplied.

As regards care home fees, that is a little more tricky to address.

[King_Maker]

How old is your grandmother?

What is your grandmother's health like?

[Ga101]

Her health is generally ok but she is 76. As there is no inheritance tax to pay i may well leave things as they are and then hope care home assistance will never be needed