Joint Home Purchase

scottishpunter

Hi,

My parents have retired, and own their home. My brother and I would like to move them to a bigger house as we both live out of town and can't stay when we visit and to release some equity for there retirement.

We are looking to buy a house at around £160k, with my parents putting up £80k and my brother and I the other £40k each. This would all be in cash with no mortgage on the property.

I realise when we come to sell there will be capital gains tax on each of our 25% shares, but what about the inheritance of the other 50%?

Also would there be any issues for them our us if they lived there rent free?

Any other issues?

Thanks.

xylophone

There is nothing to prevent you, your brother and your parents from buying a property together.

They are not making you a gift so there is no question of a gift with reservation of benefit.

There would be no problem if they do not pay rent.

Presumably you will own the property as tenants in common which means that each of you will be able to will your portion as you choose.

As you say, CGT would apply on sale to your/your brother's portion of any sale proceeds as the house is not your PPR.

Whether or not any IHT would be due on the death of any of the parties would depend on the value of the individual estates.

However, it is usual for posters to remind people who think of doing this that in the event of divorce/bankruptcy etc, problems could occur.

scottishpunter

Thanks for the information - have spent the last hour trying to google the answer.

xylophone

Just one thought - your forum name includes "Scottish" - re TIC in Scotland http://www.firstrungnow.com/joint-ownership/joint-tenancy-tenants-in-common.aspx

"Note: The law is different in Scotland. A joint tenancy is achieved by what is called a 'survivorship destination' in the transfer deed and a tenancy in common is achieved by a destination to the buyers and their respective successors. The second alternative is the most common way of taking title to the property, which means that succession to the owners' shares in the property will be governed by their wills or by the rules of intestate succession."