inheritance question

farkkraf

Delaying payment to the others is no problem.

Trust would be needed that I would do the right thing and this is not a problem.

I currently live in the house with my father.

I would not consider getting a mortgage for 140k in next few years. Not feasible. My fathers thought was for me to inherit everything and I get a remortgage at time of death for £80k and give 40k to each sibling. Then in 10 years get another mortgage for 60k and give 20k to each sibling and the nephew. This just seems messy and probably a little illegal.

I know I cant just give this amount of money legally to each person as I will have to pay CGT on anything above the yearly limit. I was trying to think of the best way to do this without handing the taxman a load of cash and without having to sell the house. Selling the house is the last option. My father is not really bothered as long as everyone gets their share in coming years. He wants to write a will soon so he needs to know whats going to happen before he does that, thus the reason I'm asking here!!

Asking a solicitor would be an option but that will cost money, probably quite a bit. I thought this would be the best place to float this kind of question!

getmore4less

farkkraf wrote: »

@holly hobby

Thanks for your detailed reply!! 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!

the will would say something like

A to get £60k
B to get £60k
C to get £20k

you get the rest.

Since the main assest is the house this will ned o be sold to pay the money so you buy the house of the estate for £140k (estates act as if they were person that owns the asets) you get the house others get their money.

But this is not going to happen on your income.

Coming up with something that des not impact the benifit of the others is not going to be easy.

Any other grand kids?

farkkraf

Sorry I think I have been a little unclear. My main reason for asking this is to find out if there are any ways other than trusting me to do the right thing to share the inheritance. So is there a way to write said sums into a will without having to pay them immediately. This does not seem likely without getting an extremely complicated will written up.

getmore4less

Wills generaly cannot have clauses that tell other people what to do with their money

it is possible through a trust to set up that kind of thing you want but there are pitfallls especialy since the main desire is not to have to sell the house and at some point this requires at least 140k to be raised at some point.

Seriously look at hte impact on the benifits, this is a specialist areas that not many that know about trusts and estate planning will be familiar with.

It looks like income will raise quite quickly, and you then have to consider the impact of having a partner and what happens if you split.

If you inherit the house and later give money away there is no imediate tax implication BUT you have to consider your estate should you get run over by a bus.

holly_hobby

As prev stated, a will is not the answer to future provision, unless that will dictates the establishment of a trust under which the property is adminsitered. (NB - a property under trust can be difficult to be subsequently mortgaged due to the nature of trusts themselves).

Again, with the best will, whilst a forum is great for getting a guide to possabilites - you will need the svcs of a Solicitor to ensure any will and trust is both correctly administered and legally watertight.

A free half hour will cost nothing but your time, also there are various "will week " initiatives - where Sols offer the writing of a (relatively basic will) for a donation to a local nominated charity.

I do feel "bums on seats" is your next step here.

Hope this helps

Holly

CLAPTON

farkkraf wrote: »

Delaying payment to the others is no problem.

Trust would be needed that I would do the right thing and this is not a problem.

I currently live in the house with my father.

I would not consider getting a mortgage for 140k in next few years. Not feasible. My fathers thought was for me to inherit everything and I get a remortgage at time of death for £80k and give 40k to each sibling. Then in 10 years get another mortgage for 60k and give 20k to each sibling and the nephew. This just seems messy and probably a little illegal.

I know I cant just give this amount of money legally to each person as I will have to pay CGT on anything above the yearly limit. I was trying to think of the best way to do this without handing the taxman a load of cash and without having to sell the house. Selling the house is the last option. My father is not really bothered as long as everyone gets their share in coming years. He wants to write a will soon so he needs to know whats going to happen before he does that, thus the reason I'm asking here!!

Asking a solicitor would be an option but that will cost money, probably quite a bit. I thought this would be the best place to float this kind of question!

there is NOTHING illegal about giving money away

there is NO tax to pay giving money away

there is NO possiblilty you will have to pay capital gains tax

there is NO yearly limit for cgt

there is NO possibility that inheritance tax will be paid unless you die leaving more than 325,000

there is virtually NO possibility of you or your siblings paying any tax on anything

there is a very real possibility of your siblings losing state benefits is you give them 40k


please read very line and if you don't understand them then ask a specific question

but PLEASE stop saying you KNOW tax will be paid because in the circumstance you outline there is NO tax to pay

pauletruth

what would the impact of your siblings having 60k in property that they cant access. is it not counted by the benifits people. what happens if your dad goes into care. your property would be eaten up within a few years.

cte1111

I agree with Clapton.

I think there are 2 simple options:

1. Your Dad's will divides his estate between his children / nephew. As the house is the main asset, then it will need to be sold to liquidate the estate.

2. Your Dad leaves his house to you and when you can afford it in the future, you can make gifts to your relatives.

Can I recommend option 1 very strongly! I can understand your Dad's sentiment in wanting to keep his house in the family. However what happens if you get a job somewhere else? Or a few years down the line need a different type of house for whatever reason (children, disability, need to access some of the capital in the house, divorce, etc). Then the 'family' house would have to be sold anyhow.

Leaving property unequally seems the road to years of family falling out, please consider this.

Yes there may be some impact on your other relatives' benefits if they inherit some money, but they will then be able to pay their own way for a while at least which I dare say they would prefer to being reliant on the state.

ognum

To me the sensible option is that you inherit the property do not take a motgage but make regular payments maybe £250 a month to each sibling more if you are able You continue to do this until you have completed your commitment to them When your nephew is older you pay to him too this way your siblings will get small regular cash payments (you could keep a rent type book) this will then not affect there benifits and you are not subject to any tax or need a mortgage!

Mojisola

ognum wrote: »

To me the sensible option is that you inherit the property do not take a motgage but make regular payments maybe £250 a month to each sibling more if you are able You continue to do this until you have completed your commitment to them When your nephew is older you pay to him too this way your siblings will get small regular cash payments (you could keep a rent type book) this will then not affect there benifits and you are not subject to any tax or need a mortgage!

It depends what benefits they are getting.

farkkraf - you also have to think through the unlikely scenarios - you die early - does your OH inherit the house and take on the responsibility to pay your siblings?; you get health problems and can't work or become unemployed and can't keep paying your siblings; you need to claim means-tested benefits or longterm care yourself - giving money away to relatives could be considered deprivation of assets; you and your OH split up - what happens then?

It's a very complicated issue and I doubt there's going to be an easy answer.