developer suggested land sale in parcels

JonSimons

Hi All

A dev has approached regards to my house and land.

Been talking and i mentioned about wanting to leave something to kids and not worrying about inheritance tax if i should pass etc.

the title of everything is in my name, and dev suggested I split the land up so I hold one and they have another title.

The dev suggested 1.3 acres with my house remain in my name and 0.05-0.2 acre be in kids name and what he offered is split down the middle.

so house with 1.3 acres gets same amount as rectangle piece of my land with no access.

im getting the feeling he wants to do this to give me a fair price compared to others, but as to also devalue the area, as it would be then known the last house in the area would have sold for X, and he would use this to leverage his prices to others in area, where he can say "I paid so so X amount"

Is this normal? is there a terminology for this.
Or is it a big no no, as to me it looks really odd, esp if someone saw on land registry that my house and land got X yet a tiny parcel of land with no access got the exact same.

sheramber

What does he intend to do?

Knock the house down and build several units on the site?

JonSimons

Yea wants to knock it all done, they already got planning near by.

But it sounds odd suggesting land split and a small parcel of it with no access for half the whole value.

Im not to bothered as would go to my kids.

But is this known to happen, is it ok to do this. could a developer or myself get in trouble for going this route.

As i assumed on paper if they buy a property it needs to look kosher, but cant but think based on price and how small this piece of land is it would look odd selling for same price as my house and all the land

JonSimons

sheramber wrote: »

What does he intend to do?

Knock the house down and build several units on the site?

reply above thanks in advance

Mojisola

A piece of land without access isn't worth much (anything?).

I would be concerned that the developer was conning you in some way.

Why not just sell the property and give a lump sum to your children?

[Deleted User]

I wonder if its possible for him to buy the piece of land with access, and 'forget' to buy the other piece of land or come up with some excuse to not purchase it.

Personally, unless it has an advantage to you, I would just sell the whole thing and not go for an overcomplicated deal where it doesn't need to be.

JonSimons

Mojisola wrote: »

A piece of land without access isn't worth much (anything?).

I would be concerned that the developer was conning you in some way.

Why not just sell the property and give a lump sum to your children?

He said he will pay for the parcel first then pay for the larger piece inc house after, but obviously sign agreement for the house and land at X price

regards to lump sum, i thought you cant gift children lump sum, he did mention about deal of a house at cost etc too for them instead of the money

deannatrois wrote: »

I wonder if its possible for him to buy the piece of land with access, and 'forget' to buy the other piece of land or come up with some excuse to not purchase it.

Personally, unless it has an advantage to you, I would just sell the whole thing and not go for an overcomplicated deal where it doesn't need to be.

Yes seems over complicated but he actually seemed he wanted to go this route as said would offer a little bit more, thats why i feel he wants the area to seem less in value as he would say "i purchased your neighbour for X amount, here is the land registry document to prove it"

theres a game obviously here but he said he will pay for the parcel first them month later the house and land, and I can live in it free until its ready for development.

But i'm unsure if its legal or known they do this. he said basically he has gave us a figure and im the one to decide a value for the land split. and he will pay, but it just looks odd, and if people found out how i did it, would i be accused of dodging tax or inheritance tax?

And if it was seen i was doing this, would the developer by accountable to for facilitating it also?

And as mentioned he said about taking a bit less and will give a house at cost, so he pays a bit less by us basically paying them back for a house but at cost, but obviously if i sell i gain a bit more money too

Doozergirl

You told us in the first few sentences why he's doing it.

If you don't want to do it that way, don't. I suggest that inheritance tax planning would be better done with the professionals, not a property developer.

He doesn't care what the house appears to sell for online. Even if he did, that's not how the property market works. Prices are set by more than one house and prices move all the time.

Stop overthinking it. Sell it as one piece and go and speak to a solicitor about writing a proper will.

getmore4less

regards to lump sum, i thought you cant gift children lump sum, he did mention about deal of a house at cost etc too for them instead of the money

house or land no difference you can gift as much a you like.

What value are we looking at here is IHT even an issue.

Do you want to sell and move on?

eddddy

To be honest, you sound a bit out of your depth. You seem to be worrying about the wrong things.

A negotiation between "somebody who's a bit out of their depth" versus "a professional developer" isn't a good idea.

I would suggest that you get a professional land agent involved, who can look at the land, give you an idea of its development potential, and therefore it's value.

In due course, you'll probably need a specialist solicitor as well - as the developer might start talking about "a conditional contract subject to planning", "an option to purchase" etc.

Mojisola

JonSimons wrote: »

regards to lump sum, i thought you cant gift children lump sum

It wasn't the developer who told you this, was it?

You can gift what you want and there is no gift tax but you do need to check the inheritance tax implications - which would be the same whether you gifted the land or cash.