Mum's inheritance doesn't stretch to a house... help!

wibbler

My mum and dad have worked away for 15 years caring for my grandmother in Sussex. They haven't been able to afford a house, and have rented. They are 63 now. My grandmother passed away a couple of months ago, leaving a house worth £850,000. After dividing it between my mum and her sister and adding inheritance tax and fees, my mum's left with £250,000 - which is really a disgrace, but that's for another day.

She is trying to buy a house - but anything remotely decent within 30 miles of them is well over £250,000 now, so she needs a mortgage. She can't get a decent mortgage because of the current housing crunch, and the fact that by the terms of the available mortgages she needs to pay off the mortgage before she's 70.

Is there any help for people in this situation? My parents have grafted for years, paid all their taxes, given a chunk of their inheritance to the Government - only to be left with the remaining (albeit quite substantial) amount of money that doesn't even begin to pay for a house. Anyone have any ideas?!

divadee

where abouts do they want to live? would they consider a flat instead of a house?

milkydrink

Even in the south east, you can find a small house for that money.

A_Nice_Englishman

You don't say what part of Sussex, but Rightmove lists hundreds of properties under £250K within 30 miles of Brighton
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silvercar

I'd get an accountant to check those figures. inheritance tax of 350 implies an estate of 875 after the allowance. Isn't the allowance 600 (including passing over of the grandfathers allowance) since the pre-budget? which would mean an estate of 1475. 1475-350=1125 divided by 2 is 562.

dolce_vita

wibbler wrote: »

My mum and dad have worked away for 15 years caring for my grandmother in Sussex. They haven't been able to afford a house, and have rented. They are 63 now. My grandmother passed away a couple of months ago, leaving a house worth £850,000. After dividing it between my mum and her sister and adding inheritance tax and fees, my mum's left with £250,000 - which is really a disgrace, but that's for another day.

She is trying to buy a house - but anything remotely decent within 30 miles of them is well over £250,000 now, so she needs a mortgage. She can't get a decent mortgage because of the current housing crunch, and the fact that by the terms of the available mortgages she needs to pay off the mortgage before she's 70.

Is there any help for people in this situation? My parents have grafted for years, paid all their taxes, given a chunk of their inheritance to the Government - only to be left with the remaining (albeit quite substantial) amount of money that doesn't even begin to pay for a house. Anyone have any ideas?!

I can't really see what you are getting at here or what sort of answers you expect without getting into arguments about inheritance tax.

merlinthehappypig

Sadly, the questions really ought to have been asked prior to your Grandmother's death as much of the inheritance tax could have easily been avoided. I know this doesn't help your parents, but is a lesson for anyone else in a similar situation. For any tax experts - presumably the Grandma died too early for this retrospective £600000 inheritance tax threshold recently introduced for married couples?

Curv

wibbler wrote: »

... anything remotely decent within 30 miles of them is well over £250,000 now ... Anyone have any ideas?!

According to Rightmove there are 1223 2+ bed properties for sale in Sussex for £225K - £250K.

My idea: Get your Mum to be a bit less picky...?

merlinthehappypig

silvercar wrote: »

I'd get an accountant to check those figures. inheritance tax of 350 implies an estate of 875 after the allowance. Isn't the allowance 600 (including passing over of the grandfathers allowance) since the pre-budget? which would mean an estate of 1475. 1475-350=1125 divided by 2 is 562.

Sorry silvercar - we must have been posting at the same time! I wasn't sure if the date of death was relevant here - presumably it can't be completely retrospective or the Govt would be repaying loads of IHT. The figures certainly imply that just the £300000 allowance was used. I guess the net figure of £500000 is after IHT and estate agents/solicitors fees.

wibbler

Hi all, thanks for your quick responses! Here's some answers:

- Yep, she died two weeks before the lower inheritance tax threshold kicked in!
- She lived in Midhurst - parents rent in Liss, Hampshire
- They would consider a flat.
- I know there are ways of getting around the tax that could have been done - but my grandmother didn't trust anyone enough to hand the money over...

As Dolce Vita asked, what I'm asking is:

- whether there is any assistance (government or otherwise) to enable them to buy a reasonable house after being model citizens?

- Also, I would like to ask whether people think its sensible to buy a house now, or sit on the money and its interest and wait until any crash happens?

The reason I'm asking here is that even IFAs seem to be recommending routes that would make them the most commission, and you guys seem as impartial as they come!

silvercar

Missed the bit that said she died a couple of months ago.

So we are talking of an estate of around 1175. 1175-350=825. How much can costs be? Still leaves 400 each I would think.

I would have thought, that with the length of time people can now live to, waiting for your inheritance is leaving it a bit late to buy anything other than a retirement flat for yourself.