Advice please

biblee

Hi
I posted a query on the house selling board and it was suggested that I post here. Given that the reply asked a couple of questions I will expand with answers. Any advice would be gratefully recieved.

Sadly my grandfather has just passed away. My grandmother has now decided that she doesnt want to live in their house anymore, and has thus suggested that she gives me and my brother some of our inheritance now in the form of her house, but that we then buy her a smaller a house.
Her house has been valued at 230 000, and the house that she wants to buy is 140 000 (the rest of her estate is probably about 130 000).

My brother (dear of him!) is happy to let me and my OH live there (we are in Cornwall and whilst I am on a good salary most houses in the area we are our out of our reach I am also expecting and would like to become settled asap).

Our plan was that she would sign the house over to me (my brother would just keep his stake in the house which would be about 45 000 - although not on the deeds??), I would then remortgage the house for just over 140 000 (needs some slight alternations etc) to buy her new house.

Would all this be ok, would we need to get to get things drawn up by a solicitor (more in terms of inheritance tax etc rather than agreements). Is there a better way of doing it? Is there something that I am missing?

Many thanks in advance

margaretclare

I can understand why your gran doesn't want to live in her house any more - memories can become too painful - but I can't see why she doesn't just sell the house, buy the one she wants which is cheaper, and then give you whatever money she wants to!

These solutions can get terribly complicated and I am all for simplicity - 'because life's complicated enough'.

Margaret Clare

mishkanorman

I dont think that your brother could just own part of the house but not be on the deeds, it makes for a tricky situation if anything was to happen. horrible to think about but if you and your partner were to pass away the house passes to your next of kin automatically ie not him, or if you have a will and leave him his share he may have to pay inheritance tax, equally if the value of the house was to dramatically fall or rise how would that change his £45k stake ??

Is there any way of getting a slightly higher mortgage, buying the house for your grandmother as you plan, and giving your brother a lump sum of say £20k and pay the rest off monthly like a loan?

sorry to be negative might it seems that although its a good idea now it could give you a bloody nightmare down the line.


mishka

sarahlouise210

How about ... would Gran be prepared to use some of the rest of her estate to buy the new house? If the house was transferred to your name and you can only afford to raise £140,000 mortgage then perhaps you could give your Gran £95,000 and your brother £45000 and she could use some of her other £130,000 to make up the difference between the £95,000 you give her and the amount needed for her new house? Bit cheeky but would solve the worry of having your brothers share in the house. If Gran would not be prepared to do this then struggling to get the higher mortgage would solve the problem. It is a great start she is giving you but you need to think carefully about every possible eventuality.

biblee

Thanks for your advice.

Whislt it may sound like favouritism to me over my brother, my being pregnant led my grandparents to want to try and help me. If my grandmother was to sell the house (which she really doesnt want to do as my grandfather always has talked about my living there and she wants his wish to be fulfilled) she would not give us (me or my brother) the money now. I know this sounds silly but my grandmother is somewhat stubborn.

Fortunately my brother is in no rush for the money anyway, and is happy for us to have the house (with the premise that when we can afford it we pay him back or that he will take my share of any further inheritance, which ever happens sooner).

I know alot of families are funny around money etc, but I can honestly say that I do not envisage things turning nasty between me and my brother over this. my main query was in relation to how this situaiton would impact upon inhertiance tax etc and the best way to do this in relation to avoiding having to pay additional tax etc.

Thanks again for your advice I will discuss with my family.