Buying parents house form them ?

M635

Problem resolved.

tbs624

If there is the possibility that your parents will need to go in to residential care in the not too distant future you/they may wish to google the term "deprivation of assets"

Note too that if you and your siblings were buying on a residential mortgage the lender is likely to want to know more about the intended continuing occupancy by your parents.

tyllwyd

What if your parents want to move home in the future and one sibling doesn't agree? What if one of you wants to sell in the future? What if one of you stops paying their share? What if one parent passes away and the other one remarries someone none of you like?

There are way too many potential problems to make this a good idea. As a start, your parents need independent legal advice (separately from each other as well) before signing away their main asset.

CLAPTON

it makes no sense to me; why are they doing this?

firstly if/when the house is sold you and your brothers will be liable to capital gains tax as you won't be living there

the fact you are paying for the mortgage for this house, will undoubtedly affect you when you want a second mortgage to buy your own place

if your parent total estate is liable to IHT then the house will be included in IHT as the property will be considered as a gift with reservations so the 7 year rule will not apply

kingstreet

Crossed post on M&E board, folks.

https://forums.moneysavingexpert.com/discussion/3719021

kingstreet

CLAPTON wrote: »

the property will be considered as a gift with reservations so the 7 year rule will not apply

If it is sold to the siblings and the cash is gifted to them, not the actual property?

M635

Problem resolved

noh

From your parents side it is madness.
They are not old, giving money away and the loss of security that entails makes no sense whatsoever.

M635

thanks noh, but that has nothing to do with my question, and is more an opinion on my family and its not appreciated as you have no idea how our family unit operates.

CLAPTON

well how much is their estate likely to be worth; if less than 325k or maybe 650k then IHT doesn't matter in any case
on reflection, i'm not sure about how the house will be viewed from an IHT point of view

I'm a little surprised that you're are absolutely sure that 60 year old persons won't definitely want to move before they die; many at that age might live for 30 years.. that's a long time

I'm also surprised that you are absolutely sure that none of the three brothers will marry and then die or divorce when the part ownership of the property will pass to some-one else

I'm slightly less surprised that you consider it impossible that any of the three brothers could ever get into debt where the property might be forceably sold as part of a settlement

noh

M635 wrote: »

thanks noh, but that has nothing to do with my question, and is more an opinion on my family and its not appreciated as you have no idea how our family unit operates.

However your family operates it is clear that your parents are not in the finacial position to be able to afford to gift you and your brothers £100k.
If they were they would be able to do so without giving away their house.
Clapton has highlighted the downsides.
There are no upsides whatsoever from their side.