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Where Taxpayers and Advisers Meet

Creating a Joint tenancy in my parents house

skid999
Posts:3
Joined:Sun May 01, 2022 10:52 am
Creating a Joint tenancy in my parents house

Postby skid999 » Sun May 01, 2022 11:56 am

Hi my sister and I live in my parents house and have become their main carers.

We're about to remortgage to make some accessibility changes and provide some separate living spaces. I'm thinking of adding myself and my sister to the deeds and the mortgage as joint tenants.

We'd all be on the mortgage so I don't think it would be a gift with reservation but do we need to do something specific with the bills & running costs?

I imagine that because of survivorship it would simplify the transfer on their passing?

What are the implications for Stamp duty, IHT, etc. and are there any pitfalls to be aware of?

What's the process of steps we need to follow and what sort of specialist advice should we seek?

someone
Posts:692
Joined:Mon Feb 13, 2017 10:09 am

Re: Creating a Joint tenancy in my parents house

Postby someone » Sun May 01, 2022 9:16 pm

I'm almost certain you cannot do that absent a court order.

Your parents could add you and your sister. It's not obvious from your post whether they're capable of making such a decision or you're acting under a power of attorney.

The tax situation is complex.

If you are acting under a PoA and the only way to raise essential funds to adapt the house for your parents is to get your name on the deeds then you're going to need a solicitor expert in this sort of thing. Apart from anything else you'll be risking claims of fraud if everything isn't done exactly by the book.

If your parents are mentally capable and this is for IHT planning then you need an accountant who can talk you through all of the pros and cons. My layman view is that IHT "planning" that involves giving the main home to children but continuing to live in it is very often a gift of more tax to the taxman than would have been paid if nothing at all had been done.

skid999
Posts:3
Joined:Sun May 01, 2022 10:52 am

Re: Creating a Joint tenancy in my parents house

Postby skid999 » Mon May 02, 2022 12:49 pm

Thanks for the really quick response and for the pointers on where to go for more help.

My parents are still competent they just need ground floor living, wheelchair accessible bathroom and the like so it's not under a PoA.

They'd still be fully involved in the process.

I think there are IHT provisions for co-habitting but that isn't our primary goal (but likewise can't be completely ignored).

My parents need daily support from shopping to operating medical equipment. My sister and I had moved back home but it's clear now that these needs are going to be long term.

With my parents in the ground floor "granny complex" the upper floors are going to be our "flats" and hence we're contributing to the renovation costs.

Making a joint tenancy for all of the flats seemed sensible for the refinancing and the property (and mortgage liability) would pass to us through survivorship so there shouldn't be a need to separate the deeds etc. for the upper floors.

It makes more sense (IMO) for my parents to add my sister and I to the deeds and pay part of a new mortgage than to give the whole property to us and pay us rent to continue living there.

From what I've read we also might need to make sure my parents pay more of the bills and sort out other intricacies so it sounds like we need an accountant familiar with this sort of situation.

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Creating a Joint tenancy in my parents house

Postby maths » Mon May 02, 2022 1:08 pm

What's the market value of the current property and how much is the outstanding mortgage?

skid999
Posts:3
Joined:Sun May 01, 2022 10:52 am

Re: Creating a Joint tenancy in my parents house

Postby skid999 » Tue May 03, 2022 8:54 am

House value is £760k according to Zoopla.

Outstanding mortgage is £100k.

Looking at extensions to the ground and 1st floor plus the loft.

We would be adding bathrooms on the ground floor and loft and kitchens on the 1st floor and loft.

All this to be financed by the remortgaging.


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