inheritance question

holly_hobby

farkkraf wrote: »

Not much else. There is the furniture in the house, vehicles worth a few thousand and maybe £5000 savings which he will probably spend. No debt at all and the house is fully paid.

No IHT liability.

farkkraf wrote: »

All are over 21 and the nephew is 16. My siblings are on benefits in council houses and have no income!! I have just left university and have a basic income of around £18k + bonus/overtime, I have £10k save up from the past year.

Ok - so you have no chance of purchasing the property from the estate. And they will lose any means tested benefits (which I'm not saying is a bad thing if receiving such an amount).

farkkraf wrote: »

My logic around buying a house is that my father could leave the inheritance to myself alone. I could then buy a cheap house respectively for both siblings and gift this to them. No AGT would be due on either house if I live more than 7 years so I would have the main house and they would each gain a house to live in worth £60,000, effectively splitting the inheritance as originally proposed.

You won't achieve mges for 120k on 18k basic (not forgetting deposits reqd).

farkkraf wrote: »

What my dad does not want is for the house to be sold and split between us, which would probably be the case if left as is. My siblings have no money so they would force this. Its a beautiful house in a good location and he wants myself and my partner to make a home of it but he does not want my other siblings to be without.

Your financial situation does not support your requirements as they stand. The property could of course all be left to you - with a codicil that if you sell it, x amount has to be paid to the relevant parties (see a solicitor for this).

Other than that, to ensure fairness, I think the property will have to be sold to distribute the funds as reqd.

I'll keep pondering .. and pop back with anything else ..

Hope this helps

Holly

farkkraf

Mojisola wrote: »

If I was on a low income or benefits, I wouldn't want to give up a council property for all the costs involved in maintaining my own property unless the council house was in a really bad area.

On the other hand, your siblings may lose all their benefits if they inherit £60,000 in cash.

I do not want them to lose their benefits. One is just lazy but the other is disabled so finds it very hard to work. The lazy one lives with her partner in a council house in the partners name and the disabled one lives in a tiny flat. I was thinking of purchasing a house for around £50k now and hopefully paying the majority off in coming years. When the worst happens I can remortgage the inherited house for enough to purchase another house in similar value range and pay off the remaining on the first house. I can then gift both houses to the siblings.

Mojisola

I don't think you can stop your nephew getting access to his money at 18 unless the account stays in your name.

BitterAndTwisted

The siblings could find that they will no longer be entitled to benefits once they inherit large sums. Also your income is not sufficient at present to secure such a large mortgage to pay them their shares in any case.

holly_hobby

farkkraf wrote: »

I do not understand the last paragraph fully tho. How would I go about purchasing the property from the estate and what exactly does this mean! Uf you can explain in simpler terms your solution please!

From your recent post re your income - this solution is not a vaiable in any event.

H

holly_hobby

Mojisola wrote: »

I don't think you can stop your nephew getting access to his money at 18 unless the account stays in your name.

Could be contained within a trust (adminstered by trustees) to prevent Nephew access, but also protect the funds for his use.

H

farkkraf

another aspect would be that my partner will be a qualified nurse in 2 years and be earning around £24k. Im working my way up the ladder very fast at work so expect to be earning around 25k basic in next year and a half

Can a will be written to state that said amounts are due if either the property sold or cash to buy their share within say 10 years?

CLAPTON

IHT or cgt or even stamp duty is tha last thing you need to worry about

IHT only applies if the estate is worth more than 325,000 so it doesn't apply
stamp duty only applies on property over 125,000
cgt only applies to capital gains

if your siblings are on benefits then any inheritance or cash from you will probably adversely affect the benefits they receive; I know little about benefits but maybe some-one should look into the situation.

on your income their is no way you could currently raise sufficient mortgage to give 140k away.
if you want to buy them a house then it would be better to raise a mortgage on your father's house (i.e. if it were yours) and then give them the money to buy a house in their own name
no point it your buying a house and gifting it to them

but that would require them to trust you and your father to give you everything and assuming your would be willing and able to do the 'right' thing

frankly better to sell the family home and split the money unless everyone is willing to wait until you are in a financial position to give them the money

holly_hobby

farkkraf wrote: »

another aspect would be that my partner will be a qualified nurse in 2 years and be earning around £24k. Im working my way up the ladder very fast at work so expect to be earning around 25k basic in next year and a half

Can a will be written to state that said amounts are due if either the property sold or cash to buy their share within say 10 years?

Which may help support your proposals if the division of Dads estate is not reqd until that time ... it can not be written in a will today that you must secure 2 mges in 2 yrs time for 2 x 60k - its simply madness to consider it a realistic proposal, as there are no gtes that you can adhere to the terms of the will, which in itself can have serious consequences.

I did discuss charges/codicils earlier re the sale of the property and division of funds.

Go and speak to a Solicitor who will help reason what is the best route for you - which may involve the use of trusts, sole inheritance by you, or the sale of the property - all bringing their own complexities from your requirements.

Hope this helps

Holly

getmore4less

nephew money will have to go into trust, 18 is normal over that has tax implications.

There is no way on £18k you are gong to get a mortgage for £140.

£60k is going to mess up the benifits of the others.

If the mother left nothing to anyone other than her spouce then there is a trasferable nill rate band so upto £650k before an IHT.

Where are you living now?

If it will be acceptable to delay/phase the payments to the others there may be options through a trust.