: Advice on inheritance Tax, probate, capital gain tax

caretaker55

Hi 

Please can you help or advice if my mums dies, does she or the children have to pay inheritance Tax, probate, capital gain tax.

My father passed away in 2012 and then my brother then transferred the name to my mum back in 2013. 

She has 3 sons and 2 daughters and 10 grand kids.

She only has this house and no other savings or assets. House value will be less than £250,000 I am sure there will be no inheritance tax, as it is less than £325,000  and plus my dad died so the inheritance on my mum comes to £600,000, as his inheritance passes to her partner which is my mum. 

If there is no will made then it will go to probate and all 5 siblings will get equal share according to uk law. 

She can not make a will now, as she has dementia. 

one more question to avoid care fee can we put the property in trust , as we all 5 siblings paid the mortgage back in 1991 and also building work carried over from 1994 till today date, as we all put money towards the property, but we left the property in just our mum name, as we did not wanted create complication having 5 sibling names, as we used to all live in the same household and this is why we all chipped in paying mortgage and building works.

Theoretically the house belongs to all 5 siblings even though we left it on my Mums name to avoid complication and if my mum had to go in care, then we don't want the property to be sold, as we still have the right to share of the property, as we all use to give money to our parents and this how we paid the mortgage off and paid for the building carried out.

If you need further information please let me know.

Please advice.

66Mustang

Sadly the only thing that matters is whose name the property is in, if you helped pay for it but there is nothing on paper, then in the eyes of the law the fact you all chipped in is irrelevant

Do any of the 5 siblings happen to still live at the address AND be disabled?

If that's true then the house can be treated as their home, same as a spouse, and so it can't be sold to pay for your Mum's care home fees

Sorry I can't be more help

MW123

https://forum.scope.org.uk/discussion/118967/advice-on-inheritance-tax-probate-capital-gain-tax

If your mother's estate, including her home, is valued at less than £650,000, which is the combined total of her own nil-rate band (£325,000) and the transferable nil-rate band from your father (£325,000, assuming it hasn't been used). This means her estate is below the inheritance tax threshold.

Regarding the house, while you and your siblings have contributed to the mortgage and renovations, the legal ownership is determined by the name on the property deed, which is your mother's.

Since your mother hasn't made a will and now has dementia, she is no longer able to create one. As a result, her estate will need to go through the probate process as an intestate estate.

Placing the property in trust can sometimes be a way to protect assets, but it's not a guaranteed solution. The timing and type of trust are critical factors. If the property is transferred to a trust after a care needs assessment has begun or after a diagnosis of a condition that may require care, it could be seen as a 'deliberate deprivation of assets.' In such cases, the local authority might still consider the property's value when assessing your mother's ability to pay for care.

Given the complexity of your situation, with multiple parties contributing to the mortgage and building works, it's vital to have clear documentation of these contributions. This could potentially support a claim for a share in the property, but it's not a guarantee that the property won't be considered in a care fees assessment.

I strongly recommend seeking legal advice to navigate these complexities and ensure the best possible outcome for all involved.

Jimm_Alumni

Hi @caretaker55, first of all welcome to the community! 😊 I know it can be difficult navigating these complexities, especially when some things have happened in the past that add even more complexity to the situation.

I echo what @MW123 says at the end of their post. I strongly recommend looking for proper legal advice. I understand there can be a worry about cost, but in any issues I've had in the past I've always saved more money from the legal advice I received than what the legal advice cost. I hope you are able to sort it out, please do keep us updated if you'd like!

caretaker55

https://forum.scope.org.uk/discussion/comment/875469#Comment_875469

Thank you for your reply.

Property we left in our mums name for simple reason, as to keep me mum safe in her own property and she can not be pushed out by family member, as she has privacy and dignity to live in her own house.

No sibling has Disability and no sibling lives with my mum, they all moved out, wanted their own space and privacy, so this is why my mums lives on her own.

caretaker55

https://forum.scope.org.uk/discussion/comment/875503#Comment_875503

Thank you for your reply.

She has threshold of £650,000, as my father never used his IHT and this must of been transferred to my Mother i presumed automatically, when he died in 2011.

Property is in my mother name solely and we kept it like that by the advice of the local priest and he told me these days i have seen so many cases, when it comes to parent and money they usually (siblings) sell the property and can make you mum homeless, so this is why i left it in my mums name for this reason , so she cant be homeless and she can do whatever she wants in her own house.

I have power of Attorney and health one as well. so now it will go to probate due to no will made.

I have not put the property in Trust as yet, but to protect the property where the 5 siblings paid into Mortgage and building work, so this is the reason wanted to put it in trust to protect the property from being used for care fees.

We never had the record which amount given and so on, as we used to give wages to our parents to help out in mortgage, bills, maintenance and we just put money in one pot and did not write how much each sibling paid.

So i need to seek legal advice, as i did ask solicitor on the IHT and they said you don't need to pay, as it will be £325,000. I didn't ask CGT or care fees.

caretaker55

https://forum.scope.org.uk/discussion/comment/876320#Comment_876320

Thank you for the welcome on this site.

I have noted their reply and response.