Inheriting property

[gnubbit]

Could anyone help with a bit of advice?

My friend is saving for a deposit for his first home. However, he won't be in a position to buy for about 3-4 years. His mother is seriously ill and he and his brother (who owns a house) stand to inherit the family home (of course it may have to be sold in the meantime to cover nursing home costs).

His mother is considering signing the house over to one of both of the sons now to avoid the family home being sold to pay for care. How would that affect them tax-wise? Another scenario is that they inherit the house after her death. Would inheriting half a house mean my friend doesn't get his first time buyer status?

Any words of wisdom would be much appreciated.

 

[delgirl]

His mother is considering signing the house over to one of both of the sons now to avoid the family home being sold to pay for care.

When my parents went into a nursing home, we had to produce documentation to show that the property had been transferred at least 5 years before they entered the home. Have a look under the assets section .

Some might say that it's a form of evasion - to dispose of the asset and expect the tax payer to foot the bill for nursing home care?

 

[nelly]

Call me a cynic but I have to say i would avoid at all costs paying tax a second time on any wealth i amass in my lifetime. I am a PAYE worker.
If it was a billionaire doing the above it would be called creative/ wonderful accounting.
If his mother sells the house and gifts both sons the most of the money how would it work?

Sorry its not an answer to first question.

 

[cobalt]

Inheritance doesn't mess up a person's FTB status. From the [broken link removed]

Who is a first time buyer?
A first time buyer is a person, (or, where there is more than one buyer, each of such persons):

• who has not on any previous occasion, either individually or jointly, purchased or built on his/her own behalf a house (in Ireland or abroad) and
• where the property purchased is occupied by the purchaser, or a person on his behalf, as his/her only or principal place of residence and
• where no rent, other than rent under the rent-a-room-scheme, is derived from the property for five years after the date of the current purchase.

 

[RainyDay]

The mother should be very conscious that if she is depending on the state to fund her nursing home care, she will have very limited options about the home that she ends up in. If I was advising the mother, I'd be advising her to keep all the assets in her name so she can use them to fund her own care.

 

[gnubbit]

Thanks to all of you for the replies.

I was talking to the friend and he and his brother want her to hang on to the house "just in case". The mother's wellbeing is the number one concern even though my friend doesn't think he'll ever get on the property ladder.

I thought delgirl's point about tax evasion was interesting. Technically it's true but I feel so sorry for my friend losing the family home - he's worrying about where he'll store his stuff if it's sold!

Anyway, thanks to you all for the help and advice.

 

[delgirl]

I thought delgirl's point about tax evasion was interesting. Technically it's true but I feel so sorry for my friend losing the family home - he's worrying about where he'll store his stuff if it's sold!

Does your friend actually live at home with his mother? If so, does he fall under any of the criteria below?
It would also appear that if the mother goes into care direct from her home, it will not be taken into account.

"Your principal private residence is not taken into account if it is occupied immediately before the application and continues to be occupied by your spouse, child aged under 21 or in full-time education or relative in receipt of disability allowance, blind person's pension, disability benefit, invalidity pension or Old Age Non Contributory Pension."

 

[gnubbit]

Interesting, thanks delgirl. No, he's renting with friends and is working in a lowish paid job so he won't be eligible.