Mum and dad to remortgage to pay off mine - is it possible?

gemmsiej

My Mum and Dad want to sell half their house to my brother, this is effectively what would be my half of the inheritence. He will get a mortgage to buy half the property giving the moeny to me so I can pay off a large chunk of my mortgage. Is this allowed, what tax problems may we encounter, I know that I would be liable for inheritance tax should my parents die within 7 years, but would that be both or one parent. An other advice would be greatly appreciated. The value of the property is proabablt about £245K'ish

Thanks

getmore4less

He will get a mortgage to buy half the property

The lender will probably want all owners on the mortgage.

giving the moeny to me

No problem you have no tax liability on the gift.

I know that I would be liable for inheritance tax should my parents die within 7 years, but would that be both or one parent

Now that I am not sure on.

If the total estate is under the threshhold(£325k) then IHT will be nill anyway.
with only 1/2 the house between the 2 of then they would need some more assets.


If only your parents live in the place then this may have impact which needs looking into.

maninthestreet

How do you sell half a property to someone?

gemmsiej

My mum and dad and brother will continue to live there, the idea is my brother would buy me out of my half anyway when my mum and dad had died as he want's to remain living there for the rest of his life anyway but is doing it now, one to help me out with my own mortgage and 2 as he is 37 now and doesn't want to have to get a mortgage much later as he could still be paying it well into his 60's. Would Mum and dad and brother all have to be on deeds and on mortgage then?

getmore4less

If this is all amicable good family stuff.

I would look at the mortgage rates he can get against your current one.

No point in borrowing at a higher rate if you don't have to.

He can just gift you money monthly.

allthough doing this way is clean even if it costs more.


Age is not really an issue he could be saving to buy you out later rather than paying a mortgage, amounts to the same thing.

gemmsiej

We are paying quite a high rate at the moment, so I know he could def get a better rate than we are. Would rather he do it as mortgage as will use some of the money to pay off over draft and do a few minor renovations.

So basically it all seems rather straight forward as long as nobody falls out with each other!!!!!

Thanks for your advice.

Batchy

on paper its great... practically, its a BAD situation

But good luck, wont effect you, only your parents, who live under the roof of your sibling, balance shifts in power sharing... arguments entail.

if the property is only worth 245k there wouldnt be inheritance to pay anyway!

But if one of them needs to go in a "home" later on, then they wouldnt have to sell the house if the names are not on the deeds.

Need to ensure son's will looks after parents, as if he die's first, who does the house go to? his gf?