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Father's Finances Hit Lower Limit - Debt Accumlates on House ?

clearpath

Registered User
Feb 20, 2018
34
When my father's money hits the threshold for LA funding, do the council in Scotland then
accumulate a debt against his flat which he owns 50% of ,with my mother in it owning the other 50%, or is that disregarded ?

Thanks.
 

marionq

Registered User
Apr 24, 2013
6,025
Scotland
There would only be a debt against it if the flat was empty. The fact that your mother still lives there means it is disregarded.
 

clearpath

Registered User
Feb 20, 2018
34
Thanks, trickier now as I wanted to move my mother to a ground floor flat for practical reasons (shopping) and if my dad's half went to his bank, and she paid the new place in full, it's now sitting for MORE care fees. But if he buys the new flat 50% (PoT by her) as he is resident in the care home, he will activate ADS (Additional Dwelling Supplement) tax on a '2nd dwelling' 5-8k or so...looked at all this stuff last year till my brain melted..now these new issues after setting fire to every penny he has saved almost in care home fees....doooh !
 
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allchange

Registered User
Nov 29, 2015
76
Scotland I see. Equivalent to second home stamp duty, but at 4% instead of 3%.

Are you sure that your parents would get hit for this. I'm sure that wouldn't be intended, but obviously it depends on what the law says. I found https://www.revenue.scot/land-buildings-transaction-tax/guidance/lbtt-legislation-guidance/lbtt10001-lbtt-additional-dwelling

Which says:. "The ADS applies to most purchases of additional dwellings by individuals in Scotland where, at the end of the day that is the effective date of the transaction, a buyer owns two or more dwellings and is not replacing their main residence. It also applies to most purchases of dwellings by non-natural persons (e.g. companies, partnerships) in Scotland."

I feel that you should seek legal advice or at least ask revenue Scotland what the position would be in these circumstances.
 

marionq

Registered User
Apr 24, 2013
6,025
Scotland
As I understand it if your mother sold her present home and moved to a smaller one then your father would continue to own half of the new property and they would each have a half share of the surplus money from the sale.
 

clearpath

Registered User
Feb 20, 2018
34
Scotland I see. Equivalent to second home stamp duty, but at 4% instead of 3%.

Are you sure that your parents would get hit for this. I'm sure that wouldn't be intended, but obviously it depends on what the law says. I found https://www.revenue.scot/land-buildings-transaction-tax/guidance/lbtt-legislation-guidance/lbtt10001-lbtt-additional-dwelling

Which says:. "The ADS applies to most purchases of additional dwellings by individuals in Scotland where, at the end of the day that is the effective date of the transaction, a buyer owns two or more dwellings and is not replacing their main residence. It also applies to most purchases of dwellings by non-natural persons (e.g. companies, partnerships) in Scotland."

I feel that you should seek legal advice or at least ask revenue Scotland what the position would be in these circumstances.
Thanks. Maybe I'm getting confused between CGT and ADS...Re. "the principle residence" rules....
I think there will be no ADS as he will own no other residence so he could own 50% same as he does now.
 
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clearpath

Registered User
Feb 20, 2018
34
If a bit of money has to be added from my dad's side (as well as my mother's side an equal amount) to the new ground floor place for my mother's access that they would share 50/50, is that classifed as deprivation of assets ?
 

marionq

Registered User
Apr 24, 2013
6,025
Scotland
If only your mother is living there now and the adjustments are for her benefit then I would think the cost should be borne from her savings. Your Dad may be on the title deeds but he's not actually living there.

You could argue that in order to make the move and thus save money these adjustments are essential.