Second home to be rented

miss choc

Maybe someone can give some advice on this for me please. My mam moved up to live with me as she is unwell I became her carer so I am on carers allowance and Mam is on her pension. She has her house back home which I decided to rent. The estate agents now have tenents in mind and are ready to move in. A few questions, I dont know what account I should lodge the rental income. I am legally married but my husband has moved out I was going to lodge it into my account but would be worried my carers allowance would be taken off me
If so, it might be better to have it going to my mum’s account, assuming it doesn’t affect her pension.
Also, the other thing is, her house has been exempt from the second home tax since she has a long term illness and had to move for medical reasons. I’m not sure, but I think if I rent it out it might then become liable. Would that be right?

athtrasna

Who will be benefitting from the income? I'm assuming your mum doesn't have a mortgage?

Yes there's a chance that the income will affect state benefits at a certain level in the same way that any additional income would.

There is no second property tax any more but if your mum was LPT exempt I'm pretty sure renting would affect that. There's also income tax to be paid on rental income.

Mrs OBumble

The money should not go into your account: it's not your house, and for you to take the income from it would be stealing.

Talk to Citizen' s Information or Age Concern if you need some help with getting your head around it all.

miss choc

Yeah I guess in social's/legal eyes that what it would look like. What I want to do with the money is keep it in a savings account it pays for her day care centres, medicine and in the future if I need extra help caring or for when Mam needs to go to a nursing home I want her to be well looked after.

athtrasna

miss choc wrote: »

Yeah I guess in social's/legal eyes that what it would look like. What I want to do with the money is keep it in a savings account it pays for her day care centres, medicine and in the future if I need extra help caring or for when Mam needs to go to a nursing home I want her to be well looked after.

You still need to keep within the law and disclose the income to revenue and social welfare.

P. Breathnach

On the assumption that she is mentally sound, I would suggest that the best thing might be to set up an account in her name on which she gives you the right to sign (I'm also assuming that you are a trustworthy person).

If it impacts on her pension, so be it.

miss choc

No she is second stage dementia I have poa over her legal affairs I did that before she got bad or it would have gone ward of court. I am also in charge of her finances so I have authority over her accounts. She would not be able to deal with legal/finance stuff herself.

P. Breathnach

My assumptions go out the window then - well, hopefully not the one about your being a trustworthy person.

But the kernel of my suggestion is still there: set up a separate bank account for the rental business. It makes it a lot easier to keep track of things (including preparing accounts for tax and other purposes).

Bicycle

As someone who had power of attorney over the financial affairs of a relative with dementia, I will tell you DON'T lodge the money to any of your accounts. Lodge it to an account in the name of your Mum.

You absolutely need to keep your finances and her finances separate. You have the authority to lodge and withdraw to and from your Mum's accounts. There is no reason why you should lodge money to any of your accounts.

If necessary, "charge" your Mum a nominal amount for her accommodation with you.

There will come a time, unfortunately, when you will no longer be able to care for your Mum at home. You will need to start looking at nursing homes and the various subsidised schemes. You may even have to sell the house.

But when your Mum passes, as sadly she will, you will need to account for any income, expenditure etc. On the assumption that you are not an only child, your siblings will want to know how any income was spent etc. And inevitably, one of your siblings or your Mum's siblings or someone else will ask questions about your competence. You need to be able to show that everything was above board, that you did it all in a very professional manner.

There is also the issue of your separated husband - if the money goes into your account there may be a perception that he might have a claim on some of it. Even if both of you know that he has no such intentions.

Treat this like a non-profit making business. Keep accounts and receipts for everything. Claim any tax relief or other benefits you can. If in doubt, your Mum's GP can put you in touch with a social worker who will be able to advise.

Good luck. Its a difficult journey.

Mrs OBumble

+1 to the previous post (I've been there and done that, too).

One more thing to consider is the long term plan for the house. When your mother finally needs nursing home care(*) , will you have access to cash to pay for this for some months, while the house sells? Having tenants in it may slow the sale process down. If not, then you might need to consider selling it sooner, rather than renting it out.



(*) This may never happen. Or it may happen sooner than you expect. My family was "lucky" in that the relative had a stroke so the decision was made for us - there was no way that we could have managed to have two people to lift/turn every four hours day and night at home.

miss choc

Thanks for the messages I am actually an only child and my mothers aunt is in UK and doesnt have kids so there is no immediate family she totally trusts me with Mam's money affairs and understands that the rental income will be going towards Mam's welfare and keep. It has made it clearer for me now what to do I will look into a separate account or maybe her own current account I wont contact the estate agent yet till I am 100% sure where the income will be lodged. I and she have our own savings account so we would be able to sort out nursing home fees for the time being anyway. She likes the respite nursing home she goes to so I may check that one out. There is the fair deal scheme but she is not ready yet to go into a home so I might wait a while its hard to know when to start doing that form as she could get called for a place and may not need it yet. I cant tell yet when she needs to go in if she got a place and didnt take it I mightnt get another when I really need it.

Bicycle

One more quick - not property related - issue. There are companies that will provide part time assistance in your home. They will come in for a few hours a day (or more) to care for someone or to assist others in caring.

It is expensive but not as expensive as a nursing home and you get tax relief on it. And it gives you a break. It also allows you keep your Mum at home longer, if thats what she wants.

miss choc

Yes I go to carers support meeting you can get carers in for a certain number of hours free via you public health nurse. Luckilly I havent needed it yet as I am able to get out for a bit and she is out twice a week for 3 hours and on a wednesdays from 9 -4 so I have free time. Half of me is wary about getting a stranger in even for a couple of hours as she would be very trusting and vunerable I am very protective of her and you do her stories of people taking advantage esp of Alzheimers patients