Buying my mums home to help family...

by **bhic** on Mon Aug 01, 2011 1:28 pm

Hi,

I am a non-resident British citizen working for an international organisation in Paris (with "diplomatic status"). My only income is my salary on which I pay a special tax outside the UK or French tax systems. I want to help my family in the UK by buying my (retired) mothers house (recently valued at 115,000) and letting her continue to live there as long as she wants rent free. That way she will have adequate resources.

Are there any tax or inheritance issues to consider as I will be paying the full market value for the property? This is not a speculative venture since I would have been the eventual beneficiary anyway of my mothers estate and my only purpose is to assist her financially in the easiest way possible. I have no intention of selling the house even after she has passed away and might even eventially sell my properties in France and retire there myself.

Can I legally let her live rent free in the house once it is in my name or would it been seen as some wierd tax evasion scheme by the UK tax office?

Any advice/comments would be welcome.

by **Peter D** on Mon Aug 01, 2011 3:54 pm

There is no real problem with what you plan but when you dispose of the property you will have a CGT liability. Should you mother need to go into care then the LA would try and claim the value of the house but If you paid the OMV then they can not claim that this was deprivation of her estate. You could of course just give her the money and the house would pass to you when she passes away. Regards Peter

by **Incredulum** on Tue Aug 02, 2011 11:10 am

Why not just lend her the money. So when she dies it comes out of her estate.

That avoids any CGT landing on you (though if you're non-resident then you may well be CGT free anyway); if she's spent it then that means any care costs won't be paid for by you.