Buying a family members home

Onedog

Hi,

I wonder whether someone can comment on what is the best approach to do for the below situation

My Family member has a few property's that she rents out, we are looking at buying one of these property's from her, however the family member currently has a mortgage on this property but the market value of the house is considerably higher than her mortgage.

the family member wants to sell the property to us but for a reduced amount compared to the market value, this will allow her to pay her mortgage back to the bank and have some net gain from the sale minus the mortgage cost, but still wants to have a stake in the house should we decide to sell the property and the value of the property be greater than that we paid her for it, i.e. splitt the profit 50/50, other than this she does not want any other responsibility for the house.

My questions are:

- what is the best approach to do for this?,
- what mortgage to take?,
- are there any legal issues with this?
- what kind of contract should be put in place between the two parties?

I have been trying to research this but am not getting very far.

Many thanks

Brock_and_Roll

I trust she is not trying to avoid CGT by doing this.....? You dont want to be party to any criminality!

Onedog

nope, nothing criminal, its not our style, besides ppl always get found out in the end, we are just looking to understand what is the best way to approach this. the family member wants to come out with some money but does not want us to buy the house for market value as we cant afford it.

look forward to further comments

jkgray

I think this is highly likely to be looked upon by HMRC as a CGT avoidance scheme