HTB-ISA, Lifetime-ISA & inheriting property
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JustAnotherSaver
Posts: 6,709 Forumite
As i had a look online & saw a bit of an argument with one side saying yay & the other side saying nay i thought i'd just do what i usually do & come here for what should be a proper answer. 
My brother & sister will both be FTBs at the moment. I'm not.
They both have a HTB ISA but are looking at switching to a LISA & would use that money for a first house.
Question arises - hopefully this doesn't happen, but should my mother pass away before they become home owners how would their ISAs work? Would they still be able to use them when it comes time to buy their own house? Or because they inherited a house & therefore owned a percentage of one, well they'd still be first time BUYERS i guess but when they're asked if they've owned a home i guess they'd have to say yes?
If it matters then there's no outstanding mortgage on my mothers house, it's paid for.
My brother & sister will both be FTBs at the moment. I'm not.
They both have a HTB ISA but are looking at switching to a LISA & would use that money for a first house.
Question arises - hopefully this doesn't happen, but should my mother pass away before they become home owners how would their ISAs work? Would they still be able to use them when it comes time to buy their own house? Or because they inherited a house & therefore owned a percentage of one, well they'd still be first time BUYERS i guess but when they're asked if they've owned a home i guess they'd have to say yes?
If it matters then there's no outstanding mortgage on my mothers house, it's paid for.
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Comments
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[FONT=Verdana, sans-serif]If the inherited house was sold by the estate rather than 1st being transferred to you, you would still count a FTBs.[/FONT]
[FONT=Verdana, sans-serif]That applies even if you are the executors since the estate is a different legal entity.[/FONT]
[FONT=Verdana, sans-serif]If the equitable or legal interest is transfered to you then most likely you would not be FTBs but that is a debatable point.[/FONT]
[FONT=Verdana, sans-serif]The same question might arise if todays budget gives stamp duty concession to FTBs
[/FONT]0 -
What's the difference between sold by the estate and transferred?[FONT=Verdana, sans-serif]If the inherited house was sold by the estate rather than 1st being transferred to you, you would still count a FTBs.[/FONT]
[FONT=Verdana, sans-serif]That applies even if you are the executors since the estate is a different legal entity.[/FONT]
[FONT=Verdana, sans-serif]If the equitable or legal interest is transfered to you then most likely you would not be FTBs but that is a debatable point.[/FONT]
[FONT=Verdana, sans-serif]The same question might arise if todays budget gives stamp duty concession to FTBs
[/FONT]
Currently there is no will in place so i don't really know what the progression would be. My mother owns the house & then there's my brother, my sister & me. I would assume it passes to us 3 but that's all it is - an assumption.
So how would it go as it currently stands? If she makes a will she would just state that everything got split evenly 3 ways i can guarantee that.
This doesn't affect me as a buyer but my brother & sister have both never owned/bought a home before.0 -
JustAnotherSaver wrote: »What's the difference between sold by the estate and transferred?
Currently there is no will in place so i don't really know what the progression would be. My mother owns the house & then there's my brother, my sister & me. I would assume it passes to us 3 but that's all it is - an assumption.
So how would it go as it currently stands? If she makes a will she would just state that everything got split evenly 3 ways i can guarantee that.
This doesn't affect me as a buyer but my brother & sister have both never owned/bought a home before.
So yours is a hypothetical question as
1 your mum is still alive
2 she hasn't made a will
3 you're assuming if she did make a will, she would leave her entire estate equally shared between the 3 of you
4 you're assuming that when 3) happens, your siblings will not already be buying their own homes
Going along with all that, the first thing to say is that your mum should definitely make a will - as should you and your siblings.
To avoid precluding your siblings from HTB/LISA bonus for FTBs, your mum's will would have to specify that her house be sold and the proceeds split equally (or whatever she wants) between the 3 of you. That way you would all get £xxx
If the will says that ownership of her home should pass directly to you 3, then you would all own the respective share, and so your siblings would no longer be FTBs.0 -
1 & 2 are correct.So yours is a hypothetical question as
1 your mum is still alive
2 she hasn't made a will
3 you're assuming if she did make a will, she would leave her entire estate equally shared between the 3 of you
4 you're assuming that when 3) happens, your siblings will not already be buying their own homes
Going along with all that, the first thing to say is that your mum should definitely make a will - as should you and your siblings.
To avoid precluding your siblings from HTB/LISA bonus for FTBs, your mum's will would have to specify that her house be sold and the proceeds split equally (or whatever she wants) between the 3 of you. That way you would all get £xxx
If the will says that ownership of her home should pass directly to you 3, then you would all own the respective share, and so your siblings would no longer be FTBs.
3 isn't an assumption. I know as far as people who don't know her are concerned, especially in the online world & how that works, nothing is certain until it's done but you'll just have to take my word on it that that is what she would do.
Like i said, hopefully this doesn't happen & we don't have to deal with the house for many many years to come. I just prefer to know in advance even if what i'm looking in to may never happen.0
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