A mother gifted/transferred her family home (‘family home’) to her adult son and adult daughter in summer 2022. All of them lived in the property until summer 2023 when daughter moved out. Mother and son continued to reside in the family home. Son and daughter are now selling the family home and will use the proceeds of sale to purchase a new property/land (‘new property’) where there are 2 buildings. Building 1 is an annex (daughter and her family will reside here) and building 2 have separate entrances (mother and son will reside in one part of the building and the other part will be let for holiday lets). There is a surplus of £150,000 from the proceeds of sale which the siblings plan to use for renovations and possibly dividing the main building into 2 distinctive properties/titles. The family plans for the son to manage the holiday lets.
Mother has recently been made aware that she should have paid market rent for the family home instead of just the utility bills and is seeking advice. My queries are: -
- Is it too late now for mother to retrospectively pay rent to son and daughter for the family home? I think so, in which case it is GWRB, but see below.
- If it is not too late, how is the rent calculated for summer 2022-summer 2023 and summer 2023 onwards?
- Mother is prepared to pay rent for the new property and resets the 7-years clock. Question: Does she need to pay rent on the whole of the property or only on the part of the building she occupies?
- If the £150,000 is used for renovations, how is the rent calculated?
- What are mother’s options if she cannot afford to pay the rent/ceases being able to afford it?
Your thoughts are much appreciated.
Isadora