Financial advice

Hi

Thanks for getting in touch. I’m so sorry to hear about your mum’s diagnosis.

The first thing I would say is that your mum having a cancer diagnosis, wouldn’t necessarily mean she wouldn’t be able to get a mortgage. The decision from lenders is a financial one, so lenders won’t ask about health during the mortgage application process. However, if employment, income or credit rating has been affected then it could be more difficult to obtain a new mortgage.

A mortgage advisor or lender would more than likely encourage someone to take out life insurance alongside a mortgage for protection. In this instance the mortgage advisor or lender will ask your mum questions about her health, but it’s worth noting that it’s usually not a requirement that someone has to have life insurance to take out a mortgage.

Regarding Inheritance tax (IHT), the Nil Rate Band (NRB) at the moment is £325,000 with an additional NRB £175,000 for someone who leaves a residential property to a direct descendant. So that’s a potential threshold of £500,000 in total, anything above that amount could be liable for IHT. You can read more detailed information regarding IHT here.  

Regarding your potential idea of selling the property and the money being gifted to yourself, it can get a little more complex. If your mum has any other assets in her sole name, which might take her over the IHT threshold above, there is something called the ‘seven-year rule’ to consider. This means that any gifts in the last seven years, can still be counted towards someone’s estate when assessing any IHT liability. If your mum doesn’t have any other assets in her sole name then it’s unlikely there would be any IHT liabilities. However, if you wish to discuss this further, then please contact the Financial Guides on 0808 808 0000.

It’s also worth being aware of something called ‘deprivation of assets’. Again this is a complex area but if someone needs to apply for government benefits or they know they might need a local authority to fund care costs then it’s just worth reading up on ‘deprivation of assets’. MoneyHelper have lots of useful information here and Age UK also have a page dedicated to ‘deprivation of assets’ here.

As you mentioned, it may be worth speaking to a regulated financial adviser about your mum's options. If your family or friends don’t have any recommendations, you can find local advisers here.

MoneyHelper also have some useful websites and tips for choosing a Financial Advisor.

It might be worthwhile speaking to our Welfare Rights Team. They can explore if your mum is entitled to any financial support ranging from one off grants, to potential rent costs. They may also be able to comment on your idea of your mum gifting you money and if this will affect any entitlements. They are available on 0808 808 0000 8am-8pm Mon-Fri and 9am-5pm on weekends.

I hope I’ve provided you with a starting step, but if you have any further questions then please don’t hesitate to get in touch over the phone on 0808 808 0000 or via webchat. I can also provide information around subjects such as Insurances and Pensions.

Yours Sincerely,

Joe
Financial Guide

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