complex question about moving in with parents and owning their property

[arty]

Hi all,

My mum and her long term partner live together in a property worth £280,000 that he owns outright. He has a fairy large estate, my mum has nothing.
As they are getting older they would like me to live with them.
They want me to own their house and sell my house worth £140,000 and give that money to them/use it to buy their house.
We understand that mums partner is essentially gifting me the other half of the value of their house and the seven year rule for IH will never kick in as he will remain living in it with me.

My question is: what is the smartest way to go about this? Do I buy the house for £140,000? Put it in trust? They are not adverse to becoming civil partners and we have considered him transferring to her once they are legally civil partners but can my mum then transfer it to me? I have siblings that don't have a relationship with him so he doesn't want them to inherit the house in any way.

Many thanks for reading, I'd be grateful for any advice.

[Pezza54]

Hi
A lot to think about there.
Personally I think the 3 of you should visit a local solicitor for advice. The solicitor will want more information than you have provided, such as other investments etc.
You said they are getting older and want you to live with them. Are you prepared to become their full time carer if their health deteriorates?
If your mum's partner has to go into a care home permanently some time in the future, the council may take any large financial gifts when carrying out the means test to work out if the person should be contributing towards their care costs. This gift may be considered to be deliberate deprivation of assets and there is no time limit after the gift.
Similarly, if your mum's partner dies within 7 years after making the large financial gift, a proportion of the gift will be included when working out the total value of his estate. If the estate value is over £325K there will be IHT to pay. It doesn't make any difference if you are still living with him at the time.

[arty]

Hi Pezza54, thank you for the reply.
Yes I will be their full time carer which is why they want me to live with them.
With the IHT - value of the gift remains in his estate because he's still living rent free in the house - will they use the value of the gifts to use up his allowance first. I ask because his estate would then pay his IHT bill not me hopefully?

[Pezza54]

Yes IHT paid from his estate first.
Another possibility. Your mum marries or enters a civil partnership with him and he makes a will leaving the bulk of his estate to your mum, then there is no IHT to pay if he dies first. Your mum then needs to make a will leaving the remainder of her estate after IHT to you. To ensure your siblings have little chance of making a successful legal claim against the will, she should specifically exclude them in her will or leave them a nominal amount.(which doesn't sound as nasty)