Ownership of House

boybig

Hi - not sure if this is the right place to post. I would be grateful for any advice on the following:

I have a son aged 24 from my first marriage (wife now dead). Son lives with my Mum in her house which is jointly owned by Mum and myself. They live over 400 miles away together with son's girlfriend. I have my own house which I share with OH and another son aged 12 (son with present OH).

Mum now wants to change her will and leave one third of the house to me, one third to each of the sons. This would entail me signing new agreements and relinquishing the half I own.

My relationship with son who lives with Mum has completely broken down. I still have relationship with Mum. Son does not work and does nothing around the house i.e. simply DIY for Mum. Mum is "blinkered" and does not want son "left out".

What is the best way around this situation? What is the cheapest way in terms of capital gains tax and inheritance tax (of which I have no knowledge whatsover).

1. Do I get Mum to will her half of house to me. Then do I sign a legal agreement saying that on her death house will be sold and all the estate will be divided equally three ways?

2. Do I relinquish my half of house and sign new agreements so that ownership is split three ways?

3. What are impliactions of son already living in house - to my knowledge he and his girlfriend pay no rent whatsover. Does girlfriend have any rights?

Any implications with any of those on inheritance tax or capital gains tax?

I have owned half of the house for over 15 years.

Will I be liable for any repairs, unpaid council tax etc re. son who does not work and is living at house?

I'm sorry for long post and its a bit complicated to say the least.

At the end of the day I need advice on the easiest solution and cheapest solution for those left after Mum has passed away.

I will be contacting a solicitor in any event but would like to be armed with some slight knowedge and anyone's else' advice or opinion.

Many thanks in advance.

pania

hiya. i'd copy and paste this if i were you onto both the cutting tax and the house buyers board.
My understanding of it though which isnt gospel is as such

When people speak of "leaving a house" they are referring to the money within the property realised when it is sold. not the actual bricks and mortar.

1) if on the deeds of the property your mother and yourself are "joint tennants" then on her death the other half of her property would immediately pass to you. When this is sold her half of the money as per her will would be split as requested.
If however you are on the deeds as "tennants in common" then your mum could specify that your two sons have the right to do with the property as they wish, including forcing you to sell, occupy the property etc but your half of any proceeds would still come to you.
The way your mum is proposing to do it would be hard to work out as she is talking of the cash proceeds from the sale and not the house itself. to leave the house as she is thinking she would need to be removed completely from the deeds whilst living and yourself and two sons take over ownership of the property. This brings many legal and financial ramifications that only specialist advice can help you with.

2)tax wise, yes you would have a liability on your proceeds with regards to capital gains tax as it is not your main residence. this can be offset against maintenance and building costs to reduce the liability and a certain "allowance" is given each year.
3)Inheritance tax wise, if your mother decided to go along the lines of being removed from the deeds or giving a cash sum to any family members, if she becomes deceased within 7 years of the date that she gave the money/changed ownership of the house that will still be subject to inheritance tax and considered in the total value of the estate.
However If her total estate is less than a certain amount (i believe currently possibly around the £330k mark) then no inheritance liability would exisit.

Hope this helps a little. best advice, speak to a professional!

P
XX

pania

boybig wrote: »

1. Do I get Mum to will her half of house to me. Then do I sign a legal agreement saying that on her death house will be sold and all the estate will be divided equally three ways? as things currently stand your mum can will her half to whomever she requires, you are still entitled to your half of the proceeds.

2. Do I relinquish my half of house and sign new agreements so that ownership is split three ways? This could bring capital gains liability, legal costs, stamp duty liability if adding persons to the property dependant on the value of the property and a re-drawing up of the deeds. It would be better to come to an arrangement with mum whereby you retain your half of the house and take less from the remaining value of the estate. Her proceeds from her half of the property be split 50/50 between your sons along with any other financial assets being split 50/50.between them too.

3. What are impliactions of son already living in house - to my knowledge he and his girlfriend pay no rent whatsover. Does girlfriend have any rights? I THINK an this is just a think that if son is paying rent he can argue that he has paid towards the maintenance of the property and therefore would be entitled to an amount to the value of the upkeep that he has paid from the proceeds. Re girlfriend I believe not but best to get BOTH of them to sign a lodgers agreement (whsmith) tout suite!!

Any implications with any of those on inheritance tax or capital gains tax?

I have owned half of the house for over 15 years.

Will I be liable for any repairs, unpaid council tax etc re. son who does not work and is living at house? your mum would be paying for this and as you are both on the deeds of the property with no tennancy agreement from son/gf then you may be held liable for unpaid CT. are you currently registered as residing at the address? if not then poor old mum would be liable for the council tax on the property. Repairs, definately. you own it, you repair it. other occupants or not.

I'm sorry for long post and its a bit complicated to say the least.

At the end of the day I need advice on the easiest solution and cheapest solution for those left after Mum has passed away.

I will be contacting a solicitor in any event but would like to be armed with some slight knowedge and anyone's else' advice or opinion.

Many thanks in advance.

I'm not an expert by any means but have a good knowledge of this side of the law through employment history. however my answers arent gospel and you really would be best to seek professional advice.

boybig

Thanks Pania. I have posted on the other two boards you suggest.

I really need to get advice and get this sorted ASAP don't I?

pania

yep! pretty much so that you are all happy and that mum can enjoy her time and you can enjoy it with her without this weighing on her and you both knowing this is sorted. It is an absolute minefield yet at the mo mum is asking to take money off you to give to her grandchildren and not considering the estate she has without you. that is what needs to be given consideration in the will. x

boybig

I'm actually panicking now re what will happen when Mum goes and son is still living in house. Will I have to evict him and girlfriend? Am worried about costs of repairs (I am struggling as it is with my own house at the mo.) I would not want to keep Mum's house I would want to sell the release the equity in it.

Am wondering whether best thing is to relinquish my share of house back to Mum then she can decide what to do with it? Would I have to pay anything to do that?

Again I understand its only advice. I am definitely going to see a solicitor when I get the paperwork as I cannot remember what was on the agreement I signed when I took over half the house.

pania

yes there would be legal costs involved and would depend on whether mum had the money to buy you out or not. sorry, got to dash will reply later to help further if i can. x

tyllwyd

One thing you haven't explained is whether you have invested any money into the house, or whether your mother has just given you half of her house (for inheritance tax or whatever reason)? It probably isn't the most important part of the picture from a legal point of view, but it makes a big difference to what the other members of your family might consider to be a 'fair' solution.

boybig

Any money I contributed to the house was over 18 years ago and I am willing to "forget" that.

I have discussed with OH who just wants nothing to do with it - wants me to give my half over so Mum and son can "get on with it". She then wants our house and our estate to be left to other son.

RAS

boybig wrote: »

I'm actually panicking now re what will happen when Mum goes and son is still living in house. Will I have to evict him and girlfriend? I would not want to keep Mum's house I would want to sell the release the equity in it..

It depends who mum leaves the house to an on what basis.

boybig wrote: »

I am definitely going to see a solicitor when I get the paperwork as I cannot remember what was on the agreement I signed when I took over half the house.

You definately need that.