Q I am thinking about buying a property jointly with my stepdad. He currently owns his own property jointly with my mother. The value is about £300,000. My mother suffers from dementia and until recently has been cared for by my stepfather, but he is no longer able to cope so it has been recently decided that my mother should move into a care home.

My stepfather has been advised to split their joint cash savings so that my mother’s half can be used to pay for her care fees.

He is now, understandably, very upset and has decided to sell their joint property so that my mother’s half of the proceeds of the sale can also go towards her care home costs. He plans to use his cash savings of about £100,000 to buy another home before selling his current one. However, that won’t be enough to buy a suitable property so I have offered to help out with the purchase of a house we have found which has a price of £137,500.

He has transferred his savings to my account so that I can buy the house which he will live in. It would appear that this arrangement is not without pitfalls so we plan to get advice from a solicitor to make sure that no complications arise at a later date.
DF

A There is no need for your stepfather to sell the home he owns with your mother if he plans to carry on living there after your mother has moved into her care home. So before you go ahead with the purchase of the smaller property, your stepfather may want to reconsider his plans. In its factsheet “Property and paying for residential care”, Age UK makes it very clear that if the spouse or partner of someone who moves permanently into a care home is going to stay living in a jointly-owned home, its value “will not be counted at all in the means test” (used by a local authority to assess how much someone should contribute to the cost of their care). So rather than going to a solicitor, you might want to get in touch with Age UK Advice (0800 169 6565 or www.ageuk.org.uk) to get sensible advice on how your mother’s care home costs should be funded. You should also be aware that if your stepfather did decide to downsize, your mother’s share of the sale proceeds of the family home would then have to be included in her mean test or financial assessment by the local authority.

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If your stepfather wants to go ahead with the purchase of the smaller property you have found, the easiest way to avoid future pitfalls would be for him to buy it in his name with his savings and a loan from you to top them up to the amount necessary to pay the purchase price. You may also have to stump up the cash to pay the stamp duty land tax (SDLT) bill which will be due if he buys before selling the jointly-owned property. Assuming that you already own property, there would also be an SDLT bill for you if you bought the property in your name. There would also be inheritance tax complications if you went ahead with your original plan.



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