Tennants in Common, inherited house.

Morgage_Confused

My Dad has inherited part of his deceased parents house as tennants in common with his brother and sister.
One of the siblings remains in the house as they have done since birth.

Dad wants his share. Resident sibling wont move. Third sibling remains "neutral".

Now to avoid sibling conflict is there a sensible situation whereby I (dads son) can purchase my dads share, give him the cash he wants and have an investment in the property myself.

Rough figures.
House value £500k

How on earth do I workout a sensible value bearing in mind I cant rent out the share due to resident sibling and what about any tax implications. Capital gains tax e.t.c.

Who do I get advice from? What professional?

Thanks

da_rule

If you purchased it at market value you'd be looking at about £166k (assume you already knew that).

How much you deduct will depend on the specific circumstances. Is the resident sibling willing to pay rent or willing to cover all of the running and maintenance costs? If so, you could just offer market value and hope that the value of the investment goes up.

If there's a chance that he won't pay/look after the house then you may want to deduct some money to cover any costs that you incur.

If you already own a property you will have to pay the higher rate of stamp duty, unless you pay less than £40k. Your dad will also have to pay capital gains tax on the profit he makes.

An idea that may work, and I am happy to be shot down by others. If your dad inherited less than 2 years ago he could do a deed of variation and assign his gift in the will to you. This would avoid capital gains and stamp duty. You could then gift your dad some money, that happens to be the same amount as you'd pay for the house and jobs done. Obviously, as this is a gift, should you die within 7 years of making it, it would count towards your estate for the purposes of inheritance tax.

Keep_pedalling

Why on earth would you want to lumber yourself with a potion of a house, you can't live in, and has a co owner who is unlikely to ever want to move out.

Unless the resident sibling is paying market rent to the others, he is at a massive advantage to the other 2, living cheaply and if the house is ever sold they will probably be the only one without a capital gains liability.

I understand why your father wants out of this and if I was him I would be giving the ultimatum that either he gets his share of the estate through a mutually agreed buyout or sale or I force a sale through the courts.

Cakeguts

How is the sibling who lives in the property going to be able to maintain it on their own? This is going to need the "neutral" sibling to realise that it isn't in the interest of the sibling living in the house to stay there on their own. That sibling probably hasn't thought the situation through. What happens when they get old living in a house on their own. They probably think that the other siblings will maintain the house. People don't get to live forever in the same house even if they were born there. Situations change.

The house needs to be sold and the sibling living in it helped to find accommodation suitable for a single person.

G_M

No one has thought this through. Not the deceased when writing their will, not your dad or the neutral sibling, and not you.

I take it back- the resident sibling has probably thought it through and realised they hold all the cards.

There are ony 2 fair solutions:

1) sell the property and split the proceeds 3 ways

2) the resident sibling buys your dad's share from him and/or the neutral siblings share.

Now why do I suspect option 2 ain't gonna happen?

For option 1, you'll all have to agree, or go to court which will be divisive and expensive.

As for your plan, you'd be mad:

* you'd be liable for additional SDLT
* your dad would be liable for Capital Gains Tax
* you would eventually be liable for Capital Gains Tax
* you'd get no use from the property yourself
* you'd never be able to sell your 'investment'
* your investment might well deteriorate if not maintained by the resident sibling (who sounds selfish and irresponsible)

The only plus side would be if the resident sibling agreed to pay you rent for your share, but
a) what would (could) you do if the rent stopped being paid?
b) you'd have to pay tax on it

AnotherJoe

Agree with all the others.

Just to point out, there's already sibling conflict, it's just that your dad doesn't realise it and seemingly neither do you with your mad plan to give your money in lieu of your dads sibling. (Guess what happens when work needs doing and which mugs will end up paying for it as well so you'd just be embarking on a slippery slope)

The staying-put selfish sibling has started the conflict already, so what's your dad your got to lose by forcing a sale? There's no relationship with someone who acts like that in the first place.

G_M

Just a long shot:

* has Probate been granted?
* who are/were the Executers?
* has the property's Title actually been transfered?

getmore4less

da_rule wrote: »

An idea that may work, and I am happy to be shot down by others. If your dad inherited less than 2 years ago he could do a deed of variation and assign his gift in the will to you. This would avoid capital gains and stamp duty. You could then gift your dad some money, that happens to be the same amount as you'd pay for the house and jobs done. Obviously, as this is a gift, should you die within 7 years of making it, it would count towards your estate for the purposes of inheritance tax.

Read up the rules on DOV and receiving compensation from 3rd parties.

linked transaction chances are consideration for SDLT.

steeeb

As others have said what needs to happen is:
- Sell the house, split the monies, or:
- Selfish sibling buys the shares from other 2 siblings, or:
- Selfish sibling pays rent for living there (not ideal, pitfalls for everyone and will likely cause more issues down the line if this is how the relationships are currently).

Selfish sibling is trying to live in a house for free with I assume no responsibility and needs to grow up. The other 2 siblings need to point out how unfair it is and do something about it.

This should all of been sorted either in the will (obvs too late now) or in probate (might also be too late?).

Your dad needs to have a word with neutral sibling and point out selfish sibling is trying it on and living in a house rent free and also depriving them both of their inheritance at the same time. 2 heads will be better than one in convincing selfish sibling.

Selfish sibling will be thinking they've lived their all their lives whys should they move - they might have perhaps cared for their parents and because of that think they have more rights. You need to find out why exactly they think they should stay there and to point out why it's unfair for them to do so.

Morgage_Confused

Thanks guys theres a lot to think about here.
I was trying to find a way to avoid forcing a sale through the courts because the resident sibling has stated they wont move. I should point out resident sibling doesnt and has never worked and the house is in a very poor state of repair and has never had a penny spent on its on upkeep.
It has been 9 months since Nan passed away so this is all very current.

In answer to this post from G_M
Just a long shot:

* has Probate been granted?
No probate was applied for as the only asset was nans house?
* who are/were the Executers?
The "neutral" sibling.
* has the property's Title actually been transfered?
Yes its in three names now. Was a nightmare as there were no deeds or land registry. But that has now been sorted finally.

steeeb

Your dad really needs to try convince neutral sibling that it's not fair and that selfish sibling needs a kick up the !!!!.