Co-ownership of property with parents

[Tiggi]

Hi

I wonder if someone could help or point me in the right direction.

I'm thinking of co-investing in a property with my parents which would be their main residence. This way they'll be able to move from their current home to a nicer area, and for me, its a long term investment and to ensure my parents are nearer to me as they get older.

However, I have a number of questions:
1. What are the tax implications?
2. If they had to go into a nursing home what would happen to my share of the house? Would the nursing home have rights to my investment too?
3. Do I have to charge them rent?
4. Are there any other implications that I need to think about?

At the end of the day, I need to ensure that both of our interests are protected. Any help or advice would be appreciated!

[JustinN]

This is really something you should discuss face-to-face with a local property lawyer, and on which your parents should receive independent advice but, briefly -

1 Your interest in the property would be subject to CGT, while your parents could claim the principle private residence exemption for CGT. Each of your shares in the house would be part of your respective estates, on which inheritance tax might be payable

2 Your share would not be vulnerable, as long as the arrangement is properly documented

3 No, but you might be liable to pay tax on the rent you could have charged

4 Loads! This is why it is worth talking through in detail at a face-to-face meeting

I hope this helps

[brian]

It's also worth considering privacy implications - I'd considered inviting a family member to join with us in buying a larger property. However, despite how rosy the situation would seem at first, we figured in the end it would be impractical, because we'd effectively be asking the family member to give up any personal private life for our own convenience, not theirs.

[JustinN]

Brian -

I don't think Tiggi was planning to move in: I think her parents (only) would live in the new house and Tiggi would have a financial investment (only) in it

[brian]

Good point, my bad.