Hello all.

I'm a newbie here and after lurking for a long time I am going to ask your esteemed advice. My brother would like to buy my parents council house in Leeds. They have lived in this house for 25 years and are now retired in their mid sixties. He does not want them to face evicition when one dies and want to give them peace of mind for the remainder of their lives. He does own his own home. Is it allowed for him to give them the money to buy the house for themselves? What are the legal implications for inheritance purposes? Where do I go for a overview of do's and don'ts? So many questions, my apologies. Many thanks for any advice.

If your parents have a joint tenancy I fail to see why one would be evicted when the other dies. If that really is your primary concern you should get them to speak to someone at the council.

Council property is intended for people in need and is not supposed to be inherited via "last-minute" purchases by greedy (sorry, concerned) children. If your parents didn't have the money to buy it and you are "missing out" on a free inheritance at taxpayers expense then that's just bad luck. I certainly hope that what you are proposing is not allowed



Edit: Rewritten (before any replies added)

It is not intended as a "last minute" freebie inheritance, and I don't believe he is being greedy. As he has worked abroad for years he is not very savvy about UK council house buying ins and outs. He just wants to make sure that they will be looked after ok. Please don't imply something that he is not.

The council doesn't care where your parents get the money from to buy their house, it's nothing to do with them. However I don't know what the tax implications would be if your brother gave a "gift" of cash to your parents, which they would of course use to buy their house. If there was any tax to pay it would be on your brother's cash "gift", the fact that your parents then used the cash gift to buy the house is irrelevant.

However your parents could only buy their house in their own names, i.e. right to buy can only be done in the names of the people who hold the tenancy. Your brother couldn't be a joint buyer of the property and couldn't have his name on the mortgage or anything, your parents could only buy the house in their own names (if your brother wanted to be a joint purchaser he would have to be down as a joint tenant for a certain period, I believe it's 12 months). They also couldn't give the house to your brother once it's been purchased, otherwise they'd have to pay back their discount. However they could put your brother on as a "joint owner" after the house has been purchased, as long as their names are still on the deeds the discount doesn't have to be repaid, and then after 5 years has elapsed your parents could give the house completely to your brother so he's the sole owner. However I think this may result in your brother having to pay tax due to effectively having your parents living as tenants in "his" property, so it would be better for them to remain joint owners for as long as possible.

As far as inheritance tax goes, as long as the value of your parents' share of the house is under the tax threshold then you should be OK. It would be better if the first parent to die left his/her share of the house to your brother, and then the second parent also left his/her share of the house to your brother, as that way you are getting two tax-free inheritances (if the first parent to die left his/her share of the house to the other parent and then that parent left it to your brother then there would only be one tax-free inheritance for your brother, not two, if that makes any sense).

PS The council usually values houses at the market rate and then subtracts the discount, so if you're convinced (as so many people are) that there's going to be a house price crash then hang on for a year or two, you'll be able to buy the council house cheaper.

If you read through what you originally posted you might be able to see that it is an easy mistake to make. However, in light of the new information I acknowledge that I may have been hasty and apologize for the attack.

I suspect it probably isn't allowed, for the reasons I (bluntly) gave earlier. I also want to reiterate that it's definitely worth checking with the council about security of tenure. Don't forget that should your parents become owners they will become responsible for all buildings insurance and repairs so they may actually be more secure by remaining as council tenants if it is the case that a surviving spouse is allowed to remain indefinitely.

Edit: Just read above post. Looks like it's possible, if complicated.