Selling A Flat To A Relative

[Ric.ror]

My mother may be moving to more suitable housing the snag being she needs to sell her flat to be eligible for the new one. The plan is I am to live in her flat as it is directly above the new one. How long would a LA usually allow her to sell the flat and would she be able to sell to me at, say 50% of the market value?

Many thanks

[bednobs]

why is the LA involved - you've left out a crucial bit of info!
PS if you sell it at less than market value, don't you run into problems re avoiding stamp duty?

[Ric.ror]

This is a bit difficult
Her flat is a local authority flat (or it was)
When it became difficult for her to continue living there I called the council to see what to do
I registered her with the council although they no longer have any property

[bednobs]

if neither of them are LA properties, why would they care?

[ubasses]

Did your mother purchase her flat under the Right to Buy Scheme, if so how long she has lived there will have some bearing on how and to whom it can be sold.
https://www.gov.uk/right-to-buy-buying-your-council-home/selling-your-home

Have a look at the link. If she bought over 10 years ago, she should be able to sell without a problem.

[Ric.ror]

Ops not finished
She has been offered a number of properties by other housing associations but they were not suitable
She does have a letter of support from her doctor and when I called the council housing department today I was told she was classified as an urgent referral

[Ric.ror]

Yes she did buy it under the right to buy about 7 years ago

[woofgang]

So she owns her flat and she bought it under right to buy
She can no longer manage to live there
She has been offered other rental properties by housing associations but thy were't suitable.
She has applied to the council to be rehoused in appropriate accommodation
Is the above correct?
Would the appropriate accommodation be residential care?
Would she be renting the appropriate accommodation?
Would the council be contributing funds to allow your mother to live in the appropriate accommodation?
How long ago did she buy her flat?

[ubasses]

If she has owned less than 10 years she has to offer it back to LA or other Social housing. Explained in my earlier link.

[EDDIE51]

The LA will look at your mothers financial situation if she needs any form of funding, security deposit, housing / council tax benefit, care fees ,etc either now or in the future. If they will see that she sold her flat at under market value and will view that as deliberately disposing of assets so as to qualify for benefit. They will assess her as having received the full market value of the flat.
They can go back at least 7 years for this (probably longer now under new rules this year) So she will be classed by the LA as having the cash from the full value no matter what price she actually got.

[Ric.ror]

No it's not residential care
It's actually the flat below her now and I as her carer would move into the flat she owns

I would like to thank you all for your help so far

[DTCwordfan]

Not withstanding the minimum time, if the transaction is done, it should be made at the low end of a reasonable and justified valuation by an outsider - this covers any stamp duty issues and also potential gift tax if you were to take it at a very low price, as effectively it could be deemed as that (in part).

[Ric.ror]

Perhaps I should also add my mother has more than enough pension/s to fully cover the rent

[DTCwordfan]

why doesn't she put it in trust to you - and if she lives seven years, you get it without death duties. If she goes in between, death duties are apportioned to how much is remaining of the time. A little word with a lawyer may be in hand and I believe this would help her re income thresholds when it comes to care, when needed..

[Ric.ror]

Other than the flat (worth less than £100,000)
She has less than £6,000 savings and has already made a will leaving me everything

[DTCwordfan]

okay, that makes sense....however, just take care on any false transaction as gift tax could be deemed - max allowance £3000 a year and max of a 2 year accumulation (so £6k in year

[DTCwordfan]

sorry there, pc bouncing around - 6k in year two if 0 in year one. there would be an exposure if you underpriced by say 25k - and effectively tax could kick in if she was to pass on within 7 years .....

[Ric.ror]

This is all very complicated but I'm so grateful for all your help
I think maybe a visit to the solicitor is in order

[bednobs]

im so sorry, but i'm still confused as to why the LA would be at all interested. If they are rehousing her via the common housing register because of medical need, and they are anticipating having to contribute, then they will do a financial assesment. As her assets will take her over the amount needed to get financial help, she wont get any and will have to pay for services