Family Gift

[Joeyjake]

My mum is going to sell the family home to me at a reduced price. It is an arrangement that will suit us very well and that the rest of the family are happy with.

With this type of arrangement, will my mum have to instruct a solicitor to handle the sale, or can she just leave it to me to purchase the property and then pay off what she owes to her mortgage provider when everything goes through?

Hope this is clear - many thanks in anticipation.

[buildersmate]

Firstly selling you the property at less than its market price means she is making a Potentially Exempt Transfer (for inheritance tax purposes) for the difference between what it is worth and what you pay for it. Fine if she lives another 7 years, less than that and the sum goes into her inheritance tax liability.
Secondly if she is doing this to reduce her net assets that could be used to pay her a care home, local authorities are wise to the ploy.
Thirdly, regarding the house/land itself, you do have to transfer the land title to you at the Land Registry - otherwise she still owns it. A solicitor or licensed conveyancer is the most common means to doing this.

[chas2008]

previous answer just about sums it up, if it was that easy everone would be doing it to avoid inheritance tax..There is one other issue which happened to a friend of mine, they played the same game...came unstuck when my friend died first! that obviously wasnt in the plan. The consequence of that was his mother (who thought she was getting one over on the tax man) ended up paying over �40,000+ inheritance tax to carry on living in the house..be warned...

[Joeyjake]

Thanks for your replies. Would however like to say we are not trying to be underhand or anything - seems to be the implication.