Possible dispute over jointly inherited house

Mickey666

DepositSaver said:

MalMonroe said:

Well, here we go with families again. You're entitled to half of everything and that's what your Dad wanted. 

It's sad when things do come down to money and material possessions because it's not long since your Dad died - only the end of last year - and you and your brother must still be grieving. That's why your brother gets angry. He's obviously missing your Dad very much because he actually lived with him and saw him every day. Now not only has he lost his Dad but there's also the very real threat that he's going to lose his home and everything that's familiar to him.

If you aren't desperate for the money and there's no rush, can't you just leave things in abeyance until your brother feels better and is more able to discuss all these things more reasonably?

Obviously you'd need to check with a solicitor but I think it's possible for you to have a charge or something put on the property so that when it is sold, you get your fair share. It's obvious that you love your brother and don't want him to have to struggle. He's probably finding it extremely difficult to get his head round things at the moment, he lived with your Dad for years and now he's lost your Dad and he's on his own. It's a horrible time. He will probably come to realise, after trying to manage on his own that it would be best if the property was sold and he moved into something smaller. But right now, it's much too soon. Please don't fall out with him over material possessions, it's not worth it. He will probably need your love and support in the future as the house gets to be too much for him to manage but for now he needs kindness and understanding as well as the time to recover and get used to his drastically changed circumstances.

I'm not in any rush nor desperate for the money, and am more than happy to give him time. He's the one who has said he wants things sorted out and been complaining things aren't moving fast enough. The one thing I really don't want is to own half a house which I could end up having to pay to maintain, and which could have CGT implications for me in future. I am open to any other solution. I hope I am showing him kindness, but it is sometimes not easy when he isn't always kind himself (now and in the past).

I perfectly understand the maintenance issue if you inherit half the house (and I wouldn;t want that either) but I really don't think the 'CGT implications' are anything to worry about.  CGT can never COST you money, it can only reduce the amount you get when you sell something.  So yes, if you inherited half the house and it wasn't your main residence then you would have to pay CGT on any increase in value since the time you inherited when it was sold, but you'll still be financially better off than if you didn't inherit it. 

CGT can only reduce the amount you gain, it cannot possible cost you anything.  In that respect, there are no real 'CGT implications' in practice.

Mojisola

Owning half the house could have an impact on you if you fall on hard times and need to claim benefits - the value of your half would count as capital and stop any claim for means tested help. 

xylophone

Owning half the house could have an impact on you if you fall on hard times and need to claim benefits - the value of your half would count as capital and stop any claim for means tested help. 

I'm not so sure -  as joint owner, the OP's brother would have an undoubted right to live in  the property and I do not think that the Benefits Agency could require the OP to force a sale.

If the OP could not realise his interest, could it be taken into account when benefits were assessed?

xylophone

I'm not in any rush nor desperate for the money, and am more than happy to give him time. He's the one who has said he wants things sorted out and been complaining things aren't moving fast enough. The one thing I really don't want is to own half a house which I could end up having to pay to maintain, and which could have CGT implications for me in future. I am open to any other solution. I hope I am showing him kindness, but it is sometimes not easy when he isn't always kind himself (now and in the past).

It is a difficult situation.

It appears that the house is not in good repair and that owning it could prove quite a burden.

Why not put it to your brother that from that point of view alone, selling the property and buying one more suitable for his needs could be the optimal solution?

Suppose the house fetched £350,000  (so that your share would be £175,000) but he would need £300,000 to buy the new property outright.

You could offer him an interest free loan of the £125,000 against a first charge on the new property?

TBagpuss

IT sounds like a very awkward situation.

Normally, what you would expect to see would be the executors selling the house and then distributing the money to the two of you - it's not necessary to put the house into your and your brother's names and I think would only be done if you were agreed to not sell for the foreseeable future.

You may need to have the executor be the 'bad guy' and insist on doing this, via a solicitor if need be.

How old is your brother? I understand that he can't afford to buy you out through conventional means but wonder how close he is to being of an age where he could get an equity release mortgage? That might be something for him to consider as a way of allowing him to buy you out and to stay in the property.

I agree with Savvy Sue that making it clear to him that he won't be homeless and that the sale of Dad's house and his buying a new place of his own can be linked so he can move direct from one to the other would be the plan (assuming that his 50% would be enough to permit this  - possibly you could agree that the funds from the other assets could be made available to him to use as a deposit if necessary, with you getting back your share of that money when the house is sold.

Savvy_Sue

xylophone said:

Owning half the house could have an impact on you if you fall on hard times and need to claim benefits - the value of your half would count as capital and stop any claim for means tested help. 

I'm not so sure -  as joint owner, the OP's brother would have an undoubted right to live in  the property and I do not think that the Benefits Agency could require the OP to force a sale.

If the OP could not realise his interest, could it be taken into account when benefits were assessed?

There are definitely situations where half a house HAS been taken into account in a benefits claim, even when the claimant does not (and cannot reasonably be expected to) live there. 

getmore4less

xylophone said:

I'm not in any rush nor desperate for the money, and am more than happy to give him time. He's the one who has said he wants things sorted out and been complaining things aren't moving fast enough. The one thing I really don't want is to own half a house which I could end up having to pay to maintain, and which could have CGT implications for me in future. I am open to any other solution. I hope I am showing him kindness, but it is sometimes not easy when he isn't always kind himself (now and in the past).

It is a difficult situation.

It appears that the house is not in good repair and that owning it could prove quite a burden.

Why not put it to your brother that from that point of view alone, selling the property and buying one more suitable for his needs could be the optimal solution?

Suppose the house fetched £350,000  (so that your share would be £175,000) but he would need £300,000 to buy the new property outright.

You could offer him an interest free loan of the £125,000 against a first charge on the new property?

Could do that with the current house. 
As said a DOV to give life interest avoids the CGT issue, retains the remainderman interest as a share of value rather than a fixed amount loan. 

xylophone

Could do that with the current house

Yes indeed but it appears that the current house is in a poor state of repair and the OP's brother is not in a position to afford to refurbish.

In these circumstances a sale and purchase of a more suitable property may be the better option?

DepositSaver

xylophone said:

Owning half the house could have an impact on you if you fall on hard times and need to claim benefits - the value of your half would count as capital and stop any claim for means tested help. 

I'm not so sure -  as joint owner, the OP's brother would have an undoubted right to live in  the property and I do not think that the Benefits Agency could require the OP to force a sale.

If the OP could not realise his interest, could it be taken into account when benefits were assessed?

I did look that up and I think the previous poster was right, there seems to be only very limited reasons a second property would be disregarded for benefits assessment.

DepositSaver

TBagpuss said:

IT sounds like a very awkward situation.

Normally, what you would expect to see would be the executors selling the house and then distributing the money to the two of you - it's not necessary to put the house into your and your brother's names and I think would only be done if you were agreed to not sell for the foreseeable future.

You may need to have the executor be the 'bad guy' and insist on doing this, via a solicitor if need be.

How old is your brother? I understand that he can't afford to buy you out through conventional means but wonder how close he is to being of an age where he could get an equity release mortgage? That might be something for him to consider as a way of allowing him to buy you out and to stay in the property.

I agree with Savvy Sue that making it clear to him that he won't be homeless and that the sale of Dad's house and his buying a new place of his own can be linked so he can move direct from one to the other would be the plan (assuming that his 50% would be enough to permit this  - possibly you could agree that the funds from the other assets could be made available to him to use as a deposit if necessary, with you getting back your share of that money when the house is sold.

He is 43. I don't know what age he would need to be to get an equity release mortgage? 
I will certainly be making it clear that he wouldn't be homeless now that I know the sale and purchase can happen as part of a normal chain. I had stupidly not thought about the deposit. Would exchange and completion on the same day get round that? I've not been in a chain before as I was a FTB buying a chain free place, and I ca week before completion so not sure how exchange and completion on the same day works.