Part payment for FIL's house and gift to sibling tax implications

Mojisola

Jeremy535897 said:

One way to address this is for the value of the gift to be taken into account on allocating the residuary estate between your wife and her sister, although that means your wife gets the gift earlier, and father in law could change his mind.

I know someone who did this - one daughter had the cash to buy a house while Mum was alive; the other daughter was left an equivalent amount in the will.

Mum spent several years in residential care and there wasn't much left in her estate for the daughter to inherit - resulting in a family split and the daughters never talking to one another again.

The figures in that case were smaller than in the OP's case but still something to bare in mind.

SDLT_Geek

Disjoint said:

Hi all -
We intend on buying my father in law's house once we sell our house this fall. We will give him enough cash for him to buy his own house, and will be liable to pay stamp on that part. The rest my FIL will gift us in house value - however, my wife has a sister and we don't want this to be unfair so whatever value he is gifting us we will have to somehow give to her sister.

There is a stamp duty land tax point being missed here.  The "chargeable consideration" is not just the sum paid to the father in law.  It is also any payment made to the sister as part of the arrangements for acquiring the property.  "Chargeable consideration" is not limited to payments to the seller.  It can be paid to anyone and paid "directly or indirectly".

Grumpy_chap

The fairest way to cover this is that the OP pay the FIL enough money to buy the FIL his new house plus give to the SIL the same amount of value that the FIL is giving to the OP by way of reduction in the house that is currently the FIL's.

The FIL should take independent advice for his situation.

getmore4less

SDLT_Geek said:

Disjoint said:

Hi all -
We intend on buying my father in law's house once we sell our house this fall. We will give him enough cash for him to buy his own house, and will be liable to pay stamp on that part. The rest my FIL will gift us in house value - however, my wife has a sister and we don't want this to be unfair so whatever value he is gifting us we will have to somehow give to her sister.

There is a stamp duty land tax point being missed here.  The "chargeable consideration" is not just the sum paid to the father in law.  It is also any payment made to the sister as part of the arrangements for acquiring the property.  "Chargeable consideration" is not limited to payments to the seller.  It can be paid to anyone and paid "directly or indirectly".

Not missed,

pointed out in reply two and acknowledged by OP in reply three