2 Choices

LoppyLugs3

kidmugsy wrote: »

Five owners? My impression is that English law allows up to four. You may care to google that point.

I think you might be right. Google helped me to find this in a House of Commons document: "A maximum of four people may be registered as legal owners."

Keep_pedalling wrote: »

Don't hang on to it for sentimental reasons, with so many people involved something is likely to happen down the line that will force a sale, better to have a clean break now.

PS. are there any tax implications here, or did you accidentally post this in the wrong forum?

Part of the issue is the possibility of capital gains tax if we hang onto the property as multiple owners and then sell it in the future. That was the thinking about starting the thread in this section.... Not sure what other section would be more appropriate.

Savvy_Sue

We have a Death, Funerals and Probate section, I can move you over there if you like?

Savvy_Sue

LoppyLugs3 wrote: »

I had (naively) assumed this must to the kind of situation which crops up quite frequently - a family wishing to keep the parental home after someone passes away - but it seems to be fraught with complex problems.

As Xylophone says, "Five individuals owning a house? It seems a recipe for future headaches - the best solution might simply be for the executors to sell the house and divide the proceeds equally."

Might have to go back to the drawing board on this idea. I think I had a nostalgic attachment to the house and it is also in London, where none of us can afford now to buy a property.

the thing is, a house needs to be lived in - in my mind morally but there are also all sorts of practical reasons not to leave it empty for prolonged periods: insurance, deterioration, danger of theft or squatters etc.

It's also in my view a bit like a body - once the person has died they're not 'there' any more. I realise this may be a very personal feeling, but once we'd removed all the clutter from Mum's house, it wasn't 'hers' any more, it was just a house (and a rather better looking one than before she died at that!)

Granted none of us had any attachment to her house, as we'd all left home before they bought it.

So yes, you could let it: you could even let it to one of the family if any of you WANT to live in London.

And if there were only 2 or even 3 of you, that wouldn't be so bad. But 5 out of 6 of you - just too many, IMO. Too risky with the known unknowns, never mind the unknown unknowns!

If you do decide to keep it, I'd have some serious conversations about HOW to keep it. I wonder if putting into a family trust would work, but it wouldn't be cheap, and it would be complicated, and it would put it out of reach, and it would affect the next generation too, so if anyone of you NEEDED to realise its value you would NOT be able to do so in a hurry.

gingercordial

Another reason to think about selling: if any of you don't already own a home, when that person comes to buy one their inherited share of this house will be considered to be already owning one and therefore that person will have to pay the new extra 3% SDLT charge on buying their own house.

So you may suddenly have a sibling who desperately wants to be bought out at short notice - will all the remaining ones (be it 4, 3, 2 or 1 depending on who else has already left) be able to raise the funds to do so, or will the sibling who wants to buy a home to live in be stuck with the extra SDLT charge?

getmore4less

As far as the estate is concerned this is relatively simple it does not even need a DOV.

The 5 beneficiaries that want to own it buy it off the estate that converts it to cash to distribute. if needed the 5 inject real cash if there is not enough other cash to pay out the relevent shares.

If there is a need to raise capital through a mortgage that will make things a bit more complicated.


If 5 want to keep it then that means a trust needs to own it on behalf of the 5, then you have all the issues that with 5 owners causes with exit stratagies etc.

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IMO the keep it in the family only realy works if the family want to get use out of it long term, holidays, retirement etc, the days when generations stayed in one place are over for most families.

getmore4less

It is not clear on the SDLT on how this effects those with a beneficial interest of property held in trust that they are not legal owners of or those that are legal owners but no beneficial interest.

This might be one of those cases where the house is put into a disrcretionary trust may be better than just being held as a bare trust.

LoppyLugs3

Thanks again to everyone. More great input and food for thought.

Savvy_Sue wrote: »

We have a Death, Funerals and Probate section, I can move you over there if you like?

Yes please, Sue, if you think that's the best place for this thread.

Savvy_Sue

Moved from Cutting Tax at the OP's request: I think we have covered all the bases as far as tax is concerned, but there may be more input on the idea of 5 siblings buying a 6th out of their share of the family home.

troubleinparadise

This enquiry reminded me of a story I read recently in the DM, which perhaps highlights the pitfalls of a lovely idea of keeping a house for an extended family to use as a holiday home...

http://www.dailymail.co.uk/news/article-3413737/BONG-Feaud-Ten-ITV-newsreader-Tom-Bradby-accuses-relative-blackmail-disputed-family-holiday-home-rare-clock.html

Not the same as the OP's scenario, but an interesting read nonetheless :eek: