Buying two houses when we retire

maisie1234

I dont think we will try and put in their names tbh. With the divorce rate high and relationships breaking up I would be very angry if my money ended up with some ex of my son's.

What I will need to explore is CGT on one of the properties but that is only payable when its sold isnt it? How is CGT worked out? On the profit or the whole value of the place? They are likely to be the same sort of price so there wouldnt be a clear one to put as our main house and in fact they would both be used equally.

Daniel54

With that amount in the estate I do think it is worth having your wills reviewed and professionally written.Doesn't have to be massively complex but you can mutually ensure your boys are safeguarded whilst leaving the other partner in a good position.I updated my wiil earlier this year ( we are a bit older than you and children off our hands) and paid about £400.

CGT only an issue if you were to involve the children in the property ownership,and that is not the best idea.

You can either find a solicitor yourselves but I would recommend using an IFA who can help put some flesh around where you want to be in 10 years time financially and how you might plan for that,as well as some simple estate planning.We found the exercise really useful when we did this in our mid 50's

Geographically we are the opposite to you,but ditto regarding two incomes and an extended suburban house bought in the 80's in a decent area.

Berks /Wiltshire border area west of Newbury is nice ( mum and sister live in Hungerford) and actually the transport links to London are ever improving.

Hope this helps

maisie1234

I have a question or two if I may:

1. We buy two properties for £450k each. We decide to sell one and live in the other. What tax is payable on the one we sell. There would be no mortgage.

2. Where does CGT come in. I thought one property was not subject to CGT but we would jointly have two.

Have never owned more than one property!

Daniel54

Sorry,I was thinking of CGT in terms of inheritance.

Basically it is calculated on the difference between purchase price and sale price,less tax free allowance(s).You would need to take advice on this but it shouldn't put you off what sounds like a good plan for the two of you.

it is not payable on your nominated main residence but would potentially be payable on the property deemed to be your second home.

More professional advice needed on this than I can provide

maisie1234

Thank you Daniel. I thought it was only payable on the profit element of the property. If we are staying there and not selling it doesnt really matter. Its hopefully so that we can have the best of both worlds. I was brought up in West London so know the area very well. Always liked the area around Kew, there is a tube and BR station yet you can be down the motorway in 5-10 mins

bitsandpieces

maisie1234 wrote: »

I didnt go to university but my husband did. I do feel like I missed out and dont want that for my children.

If you're still keen, no reason not to study after you retire (I think the funding system nowadays can actually work very well for older students, though you'd need to check).

If your kids are still in their teens, I think you'd be nuts to put your homes in their names (unless you have a load of cash saved on top of that). We all make mistakes as we grow up...owning mum and dad's £500k properties means that mistakes could be one hell of a lot more expensive :eek: Seeking professional advice seems sensible, but I don't think I'd focus on minimising IHT in your position - your sons will have a substantial inheritance in due course even after IHT (unless you spend it all, which you're quite entitled to do )

silvercar

maisie1234 wrote: »

Thank you Daniel. I thought it was only payable on the profit element of the property. If we are staying there and not selling it doesnt really matter. Its hopefully so that we can have the best of both worlds. I was brought up in West London so know the area very well. Always liked the area around Kew, there is a tube and BR station yet you can be down the motorway in 5-10 mins

CGT is only payable IF you sell. It is also only payable on the gain (CGT). You should nominate which one you want to be classed as your main home (PPR in the jargon) within the first 2 years of ownership. So you choose the one you are more likely to sell as your PPR or the one likely to make the most gain.

maisie1234

Thanks Silver. Probably be the one in Kew! So what stops you changing your main residence dependant on which one you want to sell. Or is that what the MP's did!

Lord_Baltimore

BitterAndTwisted wrote: »

You don't have to justify to anyone, least of all strangers on an internet forum about the life-choices you have made which have led to you being in such a fortunate position!

You do realise that no-one actually sought justification of anything?

Maisie1234, you had my comments first; they still look good to me but there you go.

Get a basic will in place now and amend it when your position evolves and remember it's not all about the money.

silvercar

maisie1234 wrote: »

Thanks Silver. Probably be the one in Kew! So what stops you changing your main residence dependant on which one you want to sell. Or is that what the MP's did!

If you make a declaration to HMRC within the first 2 years of ownership, you can change the designation whenever you like, provided both are available to you (ie not rented out). If you fail to make a declaration within the first 2 years then it is all decided on the basis of fact.

Your question leads me to suggest you should post on the tax board, where tax experts hang out, including former tax inspectors, accountants and at least one CGT expert (jimmo).