Inheritance, loans to children and other confusion

Sea_Shell

Juleszoemay said:

RAS said:

You could end up with a situation where your loan is a debt to the estate, and the distribution means that your brother gets half the money you repay. And his "loans" are classed as gifts, or not depending on whether the executor realises he's been re-paying at intervals.

Do your parents have wills? Even if they have, they need to talk to someone about inheritance planning as this needs sorting.

Do explain before you stop paying why you are doing so.

Hi RAS, 
The fact he is repaying it adhoc not through banking has risen alarm bells to me. And why hasn’t anyone suggested I should be doing the same? It makes no sense. Particularly as I live 5 miles from my parents and he’s 100 miles away. 

It all smells very fishy to me, and I think my brother will shaft me. He clearly has limited morals given what he’s manufactured with regard to the BTL property. On that, I have seen on land registry that he has recently added his wife to the title, and raised the value to £200k any idea why he would do that? Surely it’s not that simple to change the value of a house by adding a spouse and increasing it? Wouldn’t you have to pay SD or something? Sorry if you don’t know, I just thought someone might? 

Thanks 

So he'll no doubt expect (assume) you'll to do all the running around for your parents as they age too.

How are your relationships generally with your parents?  Is he the golden child?

Juleszoemay

Sea_Shell said:

Juleszoemay said:

Sea_Shell said:

Juleszoemay said:

I can prove when mine was received in 2012. I have the paperwork dad had to sign for ML with the solicitor when we bought the house. I don’t know if my brother has the same evidence. 

Do you mean he had to sign to confirm it was a GIFT for the mortgage lender!!

But you then made "repayments" anyway?

We didn’t have a mortgage lender. But it was confirmed he had no interest in the property through the solicitors

How much did you "borrow" in total?

Is £100,000 the "balance" and you've already paid back £80,000?  Or do you only still "owe" £20,000.

I trust your husband is aware of your financial assistance from your parents (is your house in your joint names?), but just not (yet) party to your brother's position?

We borrowed initially 280k only because we bought a home before the other had completed. We then repaid £80k which was the equity we had, then a few years later sold the house and downsized and repaid another £70k then obviously we have paid regularly and also lump sums here and there when we have been able to afford to. Outstanding we owe £100k. 

Yes, husband knows about the borrowing. And my brothers. Just not about the BTL ending up in his portfolio!! 

Juleszoemay

Sea_Shell said:

Juleszoemay said:

RAS said:

You could end up with a situation where your loan is a debt to the estate, and the distribution means that your brother gets half the money you repay. And his "loans" are classed as gifts, or not depending on whether the executor realises he's been re-paying at intervals.

Do your parents have wills? Even if they have, they need to talk to someone about inheritance planning as this needs sorting.

Do explain before you stop paying why you are doing so.

Hi RAS, 
The fact he is repaying it adhoc not through banking has risen alarm bells to me. And why hasn’t anyone suggested I should be doing the same? It makes no sense. Particularly as I live 5 miles from my parents and he’s 100 miles away. 

It all smells very fishy to me, and I think my brother will shaft me. He clearly has limited morals given what he’s manufactured with regard to the BTL property. On that, I have seen on land registry that he has recently added his wife to the title, and raised the value to £200k any idea why he would do that? Surely it’s not that simple to change the value of a house by adding a spouse and increasing it? Wouldn’t you have to pay SD or something? Sorry if you don’t know, I just thought someone might? 

Thanks 

So he'll no doubt expect (assume) you'll to do all the running around for your parents as they age too.

How are your relationships generally with your parents?  Is he the golden child?

Hahahaha exactly that. He is the golden child! How did you guess. 

And yes I’ll be the one running them around…. They are in their mid 70’s and in decent health, dad better then mum but both mobile, still drive, etc 

Juleszoemay

It’s a bit of a case of the fact I do lots, everyone comes to me for family meals. The more you do, the less you’re appreciated I think. 

Yet my brother doesn’t do a lot, but they (well mum) hangs off his brilliance. 

He went to uni, I didn’t. He got married before having kids, I have two kids from different marriages. We both earn the same, me slightly more, and they can’t get their head around that because ‘you didn’t even go to university’ 😂

Sea_Shell

Juleszoemay said:

The other string to this is that my parents bought a small 2 bed house £125k to rent out as an investment in 2010, at which time my brother did not own a property so it’s in his name, he collected the rent, took out the income tax and paid my parents.  Roll forward to now, and I’m told that the house is my brothers and that it’s just part of his borrowing, it’s not the same because it’s a self funding hedge fund in effect! But I’m supposed to be ok with this. And my brother (the accountant) has managed to bamboozle my parents into thinking it’s fair? 

Just going back to this from your opening post...

So your brother is the landlord, legally?
He collects the rent?
He pays his own personal income tax on the rental income?
He then pays X% of the rent to your parents?

How is this being categorised by him and your parents.  Is this all in cash too?

Juleszoemay

Seashell, 

Yes, the tenants are friends of mine, they’ve been there 12 years! It’s all In my brothers name because when it was purchased it made sense to do that. But it was always my understanding that it was, to all intends and purposes, my parents house and my brother was just administering it. In which case the rent post tax to my parents was their income. But it’s not being assumed as income it’s being assumed as repaying the initial £125k! So they are worse off, I’m worse off. The only person who wins here is my brother  

Juleszoemay

The house should be theirs. Even my mum still thought it was theirs. And it was just in my brothers name because when they bought it he didn’t own a house. And was teetering on emigrating…. 

Sea_Shell

One other thing I've thought of...

Now, I don't mean to add to your worries, but it sounds like your brother is not to be trusted and your parents trust him too much.

Check land registry for your parents home (it can be done for a small fee) to make sure no additional charges have been put on it, or its ownership changed.

From what you've said, I wouldn't be surprised if he talks them into doing Equity Release, so that "improvements" can be done on the BTL (his) property.

Just something to bare in mind. ☹️

Juleszoemay

Good idea, yes I’ll look online. And also they still own my grandparents house, so I will also check that one. 

GrumpyDil

If they own your grandparents house what is happening with that one? Is it let or do you mean they own it but your grandparents live there?