Postby JMW_tax » Sun Mar 17, 2019 10:29 pm
Thank you all for the valued response - and my heart sinks at the hole we may have dug ourselves! Why I did not come to you guys first for advice is quite frankly stupid on my part!
My parents estate is difficult to value, but I will try to give an idea (and the reasons for the difficulties):
1. Rented property owned outright - £230,000
2. Money in bank - Unknown - probably around £100,000 - £150,000 (though could be more - though my mother seems intent on using it up quickly !)
3. The main residence:
There are two parts to the property - originally bought as a whole some 35 years ago. Now consisting of the main house and an Annexe, both of which are very large in size. I have built most of the Annexe and had an agreement with my parents that I could live there for life (having built it). As there are two large houses so close in proximity with grounds that are shared and shared access and garages etc - all dotted around the two houses, it is difficult to see how each property could be sold separately. Likewise, it is difficult to see there being many families that would want two large houses side by side with shared facilities. I think given that I had a life long right to live in the property, the valuation of about £1m would be sensible, but if that devaluation is not reasonable, then it could be £1.5m or more I guess.
Silly question (I could probably find if I was not typing this reply) - what is residential nil band - is this a sum deducted off the the house value for IHT because we live at the property?
CGT is a very interesting twist I had not even thought of - my sister is quite young and so is likely to move out for furthering her career and exploring the world. I assume she would be liable for the CGT on her half. Yikes !
I think the issue of avoiding care home fees is probably a lesser issue - fortunately my parents are both in excellent health and very active and I do not see a significant decline happening for probably a decade or more (fingers crossed).
My real concern is the part about not benefiting for the 7 years before death - that is (hopefully) a very long time that they need to be paying a full rent! To mitigate that, if they moved out of the house into their rented house (say) for a period of 6 months or a year, would that break the chain - because then they would be returning to live with their children like many parents end up doing. Is there any possible ways to limit this problem?
Thank you so much - even though it's news that so far doesn't seem so good !