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my mum and i are thinking of putting our savings together and purchasing a home in mainland spain, and we would like my name to be on the title deeds.
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804I don't know your reasons for it to be in your name only, but I would advise against it.
It also depends on how old the 2 of you are.
If she needs to go into a home at some stage and can't pay the full rent, she could be deemed to have Deliberately Deprived Herself of Assets. You would then have to pay the rent. So if that was your motive, please think again.
Also, if you got into financial trouble she could lose her home.
Also, if you died first for any reason, there could be all sorts of complications.
It would be much better for you to own it jointly.
Mike
Posted on 28 February 2010 |
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410I think you are going to have to be a bit more specific about this. Will you both live there? Just one of you? Or is it as a holiday home?
Will you need a mortgage?
What are your concerns - taxation (including IHT) in this country? Getting a mortgage?
Why do you want it in your name and not joint? What advantage do you think this will have?
manzanilla
Posted on 28 February 2010 | Love 1 love
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272Simple answer, yes she can. It's your mum's money and she can do anything she wants with it. The only concerns are:
1. If your mum passes away within seven years of making the gift, some of the total amount may be counted as being included in your mum's estate, and you may have to pay inheritance tax on it.
2. If your mum has any medical conditions that are likely to cause her to go into a care home, then giving you the money may be treated as deliberately depriving herself of assets, and the local authority could take steps to reclaim the money from you. If you currently do not expect her to ever have to go into a care home then this is not a problem. This is a reasonable assumption if she has no medical conditions, as only 17.5% of people over 85 need to go into care homes, most can carry on fine in their own home (credit to liesarnocomfort for that stat)
Posted on 28 February 2010 | Love 1 love
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272 3thanks for all your responses, the reason behind it is that we both want a holiday home, we don't require a mortgage as we want to buy the property outright.
and there are s couple of reasons for wanting my name on the title deeds, one being that as i am younger, it is expected that i will outlive my mum, so it is easier that we don't have to change the name on the title deeds.
the other reason is that she doesn't want my brother knowing about this money she has.
my mum is 76 i am 49
Posted on 28 February 2010 | Love 0 loves
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272That sounds reasonable to me, however you do need to be sure on the inheritance tax and care home issue. If your mum were to pass away in the next seven years, you could be landed with a large tax bill on her investment in the property. Obviously, it will be much harder to pay this bill if all your mum's savings are in the holiday home, particularly as the Spanish property market is potentially one of the European markets most exposed to potential falls in the short term.
In addition, are you sure your mum is in good health? If she has had any falls / stroke / angina / arthiritis etc in the past, the local authority could argue that these made it likely that she would have to move into care in the next few years. If they claim this, then they can argue that she has deliberately deprived herself of assets in giving you the money, and may refuse to pay her care home bills unless this money is given to them.
Posted on 28 February 2010 | Love 1 love
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804I think the main points have already been covered.
The main concern would be over the state of your Mum's health. Apart from the Deprivation of Assets, have you considered whether she would be able to get medical insurance for her trips to Spain? Many insurers have age limits. Also, how long would she be able to travel backwards and forwards?
Mike
Posted on 28 February 2010 | Love 1 love
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3my mum is in perfectly good health. physically fit and able.
she owns her house in the uk.... so surely that would pay for care home bills if required?
she still gets medical insurance every trip she makes.
thanks very much for all responses
Posted on 28 February 2010 | Love 0 loves
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804If she owns her own home in UK you will need to keep her fit & healthy for at least 7 years for IHT purposes and as long as possible thereafter for care home purposes. Not that I would expect anything else of course.
I trust that she will have sufficient income after she has lost these savings.
Mike
Posted on 28 February 2010 | Love 0 loves
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804Sorry, 2 other points.
If your Mum gives you an asset (the money to buy the holiday home) and then continues to make use of it, it might be considered by HMRC as a 'Gift with Reservation'. That would not then escape IHT. I don't know the precise situation with a holiday home. It might be that if you went there sometimes on your own and if you were always there when she was there, you might be able to get away with it. Better to consult an expert to be sure.
The other point is that if your brother does find out about it, there could be problems. If your Mum by then has died, or no longer has all her faculties, he could take you to court for exerting undue influence. The costs of fighting the case could even swallow up the whole of the value of the holiday home. It can be very expensive to fight such a case.
Mike
Posted on 28 February 2010 | Love 1 love
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