Purchasing 50% of parents home.

G_M

D94ccm wrote: »

.

Further Questions:
What is the official threshold for what makes a property your 'main address'? Is there a certain number of days that must be spent at an address? How can people prove this?

Thanks again.

There is no'official threshold'. Each case is assessed on its merits.There are various criteria that would be taken into account, but a key one would be where you work.


In some cases work location might not dictate main residence, eg if you had a family living at one property, kids at school there etc, but you were working away 5 days a week and lodging elsewhere (see? each case on it's merits?), but in your case you do not seem to have direct ties to the property you are claiming as your main residence.

D94ccm

Ok,

Thanks for you thoughts.

ThePants999

AdrianC wrote: »

No, because instead of £300k house, they'll have £150k half-share in house plus £150k invested.

Just want to re-highlight this for the people still saying there are deprivation of assets/inheritance tax considerations. There aren't - the parents had £300K before and will have £300K after.

LateStarter

ThePants999 wrote: »

Just want to re-highlight this for the people still saying there are deprivation of assets/inheritance tax considerations. There aren't - the parents had £300K before and will have £300K after.

What part of the parents then paying the OP rent to live in their own house did you not understand to be fishy?

ThePants999

LateStarter wrote: »

What part of the parents then paying the OP rent to live in their own house did you not understand to be fishy?

Where did that come from!? I didn't say anything about whether it was fishy. I said that it's not deprivation of assets, nor a transfer of capital that's relevant to inheritance tax rules. Two specific technical aspects - I didn't say what I think of the scheme overall, so I don't know why you're questioning an opinion I didn't even express.

As you may have noticed, this area on the forum is big on precision. If someone posts an answer that's 99% perfect, you can guarantee someone will come along and correct the 1% that was wrong. That doesn't mean they disagree with the 99% too! (IMO, that's good - so much of what I know in this area, I've learned from other people's posts, so it's been really useful to have highlighted when something that looks plausible is wrong.)

On that note, then - if the OP's parents sell 50% of their home (to anyone), any talk of "paying rent to live in their own house" becomes highly misleading. If your occupation of a property exceeds your ownership of it, you should absolutely expect to pay rent on the difference. See, for example, shared ownership schemes.

zagubov

This is really confusing me; can part-owners be lodgers, perhaps in part of the house?

How the is the OP not also a lodger owing rent, if he is meant to be resident there?

In fact, would they have to mutually be each others lodgers?

This looks like a right mess!

getmore4less

G_M wrote: »

Be aware the property will remain in their Estate for Inheritance Tax

under which regime?

It won't be gift with reservation as they were paid for the 1/2 they sold , only 50% of the value is in the estate unless something else catches them.

AdrianC

'course, we're assuming that the OP's £150k-for-50% makes it a £300k house. Given how the rest of his little scheme seems to be structured, it wouldn't surprise me if it was £150k for 50% of a £500k+ house.

AdrianC

D94ccm wrote: »

If I invest it myself, I can only get £2,000 tax free.

So your [STRIKE]scam[/STRIKE] scheme has them subsidising your income to the tune of £5,500/year? Out of what...? The money you just gave them to buy half the house they don't actually want to sell?



Why are you so hung up on zero tax? £2k on £150k invested is 1.3%. You can get a far better return on that. BUT you'll pay tax on some of it. If you're a basic rate taxpayer, then earning £6k of return (4%) means you'll pay £1k of tax - but you'll have £5k in your pocket. Yet your zero-tax-fixation implies you think that's worse than £2k tax-free.

Through RaR I can get £7,500.

Again, slowly.
This. Does. Not. Qualify. For. RaR.

The rent they pay me comes simply from the £150,000 I transferred to them. So it is technically at no cost to them.

Umm, hold on... No. The £150k was in exchange for half of the house, remember?

Now they're drip-feeding that money back to you. If investment returns are discounted, then in 10 years they only have 50% of the house plus £75k. In 20 years, they only have 50% of the house and no cash.

And you think that there's no downside for them...?


I notice you also appear to have forgotten to consider this list of questions... Perhaps you'd care to go through it now?

AdrianC wrote: »

So what's in it for them?

And what if they want to move in the interim? What if they need residential care and have to sell the house? What if they get divorced or go bankrupt? What if YOU get divorced or go bankrupt? What if they simply fall out with you and decide to disinherit you? What if you die first?

As and when they die, you can just give your brother 50% of the probate value at that time. He doesn't need to inherit "half the house" - just half the value of it. What if your brother WANTS to keep a half-share in the house, and would rather buy you out?

Tom99

Your idea sounds a nightmare and full of holes. Why not sell the BTL buy a 2 bed residence where you live and work and get a lodger there, and leave your parents in peace.