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Using a trust when selling land
CuriousPorge
Posts: 2 Newbie
Hello all. Longtime lurker, first time poster. I'm not sure if this is the right section so please feel free to move if needs be
My nan and grandad have owned some land for the last 20 odd years. It's part of an allotment area but the plots around it seem be used for a number of different things, though grandad mainly uses it for storage and growing veg. There was talk a few years ago about the land being bought up for housing but as with a lot of things this has been delayed.
Grandparents are now getting on a bit and have decided they just want to get rid of the land, even if they could get a bit more for it by holding on and waiting for the housing development to come through. I'm in favour of this because they have a lot of family stress and their house is pretty run down and they aren't getting a lot of benefit from the land as is.
My concern with all this is that there could be quite a lot of money coming to them (estate agents have estimated around 2 mil). I know what family can be like once there's a a bit of money involved and as this could be a fair whack I'm wondering if there is anyway of protecting their money? I thought about suggesting they get an annuity which would give a regular income but i've read that their not really worth doing anymore. I wondered about a trust; that way no one can come begging them for the money as it would be down to several trustees to decide how it's spent. The other advantage of this would be avoiding inheritance tax but that's not really a concern.
They are also concerned about the money affecting their pension credit. They think they had to declare the land when they applied for the credit but it was worth a lot less when they bought it. They are scared they'll have to pay back years of the benefit, but I've tried to say that if they get this kind of money then they'd have enough to pay it back anyway.
I have suggested they speak to an accountant and a solicitor but they don't want to 'tempt fate' so said i'd try and do some research on their behalf but the google results are a bit baffling.
My nan and grandad have owned some land for the last 20 odd years. It's part of an allotment area but the plots around it seem be used for a number of different things, though grandad mainly uses it for storage and growing veg. There was talk a few years ago about the land being bought up for housing but as with a lot of things this has been delayed.
Grandparents are now getting on a bit and have decided they just want to get rid of the land, even if they could get a bit more for it by holding on and waiting for the housing development to come through. I'm in favour of this because they have a lot of family stress and their house is pretty run down and they aren't getting a lot of benefit from the land as is.
My concern with all this is that there could be quite a lot of money coming to them (estate agents have estimated around 2 mil). I know what family can be like once there's a a bit of money involved and as this could be a fair whack I'm wondering if there is anyway of protecting their money? I thought about suggesting they get an annuity which would give a regular income but i've read that their not really worth doing anymore. I wondered about a trust; that way no one can come begging them for the money as it would be down to several trustees to decide how it's spent. The other advantage of this would be avoiding inheritance tax but that's not really a concern.
They are also concerned about the money affecting their pension credit. They think they had to declare the land when they applied for the credit but it was worth a lot less when they bought it. They are scared they'll have to pay back years of the benefit, but I've tried to say that if they get this kind of money then they'd have enough to pay it back anyway.
I have suggested they speak to an accountant and a solicitor but they don't want to 'tempt fate' so said i'd try and do some research on their behalf but the google results are a bit baffling.
0
Comments
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Definitely speak to a land agent solicitor to get their perspective on this as it isn't a straightforward case.
A trust would, as you say, avoid the inevitable stresses and strains of family money issues and also deal with inheritance tax and insurance too - do they have the adequate insurance needed for owning that property / land?
Good luck!0 -
Forgot to add, selling land to a house buyer is a whole different kettle of fish than selling land to a landowner who may well be looking to get a residential planning permission. I personally would want to see any family member of mine get the maximum value for their asset. That's why I recommended a land agent. You don't want to be in a position where you sell the land for £2m but then the new landowner gets planning permission for residential and its suddenly worth £4m.
You may also want to speak to a financial advisor as a separate conversation.
Long and short of it all is I don't think you'll get the answer you want from googling. I think a couple of conversations with people who specialise in these sorts of property transactions are needed.0 -
The other advantage of this would be avoiding inheritance tax but that's not really a concern.
How much do you know about trusts? I really would not make this assumption - your grandparents should consult a solicitor expert in wills and trusts if they even think of going down this route.
https://www.step.org/step-directorytheir pension credit.
Do they have an AIP?
https://www.entitledto.co.uk/help/assessed-income-period0
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