Joint home ownership - selling share to son

Keep_pedalling

dottiec said:

Keep_pedalling said:

dottiec said:

Keep_pedalling said:

You would be very foolish to give your share away unless you have other major assets to fall back on should something go wrong with your living arrangements such as your son pre-deceasing you going bankrupt or simply a major falling out. 

Thank you.   Unfortunately I have had some poor dealings with solicitors which is why I try to explore all options before seeing a specialist solicitor, who more than likely will not advise on any tax implications. 

You have given me more food for thought as I have not considered the situations you have outlined which shows how helpful these forums are - I am more preoccupied with my eldest son being able to remain in the property.  Something else to investigate.  

If I go ahead with the Deed of Assignment, I would like to be reassured by having some sort of agreement to say I can stay in the property (or my sons have to provide me with accommodation) until I die - is something like this available.  

In the end, as you say, I may decide it is better to leave things as they are but I need to satisfy myself that this is the right decision.

Many thanks

Why do you have a particular concern for him? It does not sound like he is financially dependant on you as you were talking about him buying a larger share. What will happen if at any point he wants to go his own way for any reason?

My eldest son has a low paid job and we live very well, in harmony (each with our own space but together if you know what I mean).  My eldest son does require support and I am just trying to smooth the way for him when I've gone - it will still be very hard for him.  My youngest son has been taken care of financially so we have no worries there.

I am just trying to establish our options before making any decision.  I won't do anything unless I am assured a lifetime tenancy in my home - which is why I have asked whether anyone is aware of a way I can achieve this. I am not worried about my son's future intentions but if a third party enters the scene then I realise how vulnerable I might become. I understand how important this is and will do nothing without a legally binding assurance. Can anyone help with this?

I would probably be better leaving things as they are but am concerned that should I need residential care the Local Authority may require my son to sell our home.  Even if that's not the case now, who knows what might happen in the next few years.

Doing it for that reason is deliberate deprivation of assets

Thank you again for taking the time to respond. 

One of the complications here is your younger son’s part ownership. He does not benefit from this assets and may never do so if he does not outlive his brother so is there any real point in that continuing? If you can buy him out and split the ownership 50/50 with you older sum that might make a good compromise.

Do you have an up to date will in place?

dottiec

Annisele "For inheritance tax purposes, gifting a house while retaining the right to live there rent free counts as a "gift with reservation". There are a bunch of rules around that, but the point of those rules is that you don't save any tax - HMRC is wise to many kinds of plan."   

This is a point I am not sure about.  I would only be gifting for example half of my one third share.  Therefore if I had to pay rent to my son, would the rent only be to cover the other half of my one third share, or as my son and I remain living together do I actually have to pay rent.  Happy to do so but unclear of whether it's required.  If it is, my son would have to declare the rent.
 
Also with a Deed of Assignment (ie assigning half of my one third share) this does not involve the mortgage company as there will still be 3 legal owners so we are still all legally obliged to pay the mortgage no matter what share each of us has.

I have wondered whether the local authority would be able to impose a charge (ie deferred payment) on a property that has a mortgage.  Anyone know the answer to this please?

Keep Pedalling  "One of the complications here is your younger son’s part ownership. He does not benefit from this assets and may never do so if he does not outlive his brother so is there any real point in that continuing? If you can buy him out and split the ownership 50/50 with you older sum that might make a good compromise.

Do you have an up to date will in place?"

Our situation is complicated by joint ownership/mortgages which we had to do to enable us to get a mortgage due to very low earnings.  My two sons share a further house which is rented out which they hope to sell in the near future the proceeds of which they hope to use for my eldest son to purchase my youngest son's share in our current home and to enable my youngest to be able to buy his own home solely in his name.  This has been the aim all along but it was how to achieve it.  

The fixed mortgage on our current home ran out in January and we have struggled to get a fixed rate with the same provider (mainly because it is interest only) and this is not a big mortgage debt.  Goodness only knows how people are managing at the moment.

We all have Wills which will have to be changed to tenants in common if I decide to assign part of my share.

Any further input would be much appreciated.  This is helping me to put things into perspective but I will seek specialist advice before making a final decision, although I would never go to a solicitor for advice without doing a lot of background research first.

Keep_pedalling

Inheritance tax is only a consideration if you are actually in IHT territory which sounds unlikely if you are worrying about deprivation of assets. If your share of the house is worth £175k or more your estate has exemptions of £500k (iif less than that then £325 + the value of your share). If you are a widower it can be double that.

diystarter7

Hi OP

Reading through your post and some good help here by others, I wish you luck
It is confusing and I'm only too aware about going around in "circles."

Good recommendations have been given, EG, think hard about what you are doing and I'm 101% with that

I understand your concerns and many other people like you.

As and alternative option that does not involve your property

Have you considered life insurance especially if you have an ongoing one to put in trust?  Starting a new one may/will be expensive given your age and reasonable payout IFA that came to our house discussed it as I was worried re care home fees (deprevation of assets) etc  and  NOT sure if it covers that but you can check  - It easy good read for a well-established insurance company below
(they recommended legal advice if you have an existing policy)

https://www.aviva.co.uk/insurance/life-products/life-insurance/put-life-insurance-in-trust/

quote

How to put your life insurance in trust

Your first step is to make sure it’s the right thing for you. Remember to get independent financial and legal advice before going ahead.

Otherwise, it’s usually a pretty simple process and can be done any time.

If you’re thinking of doing it when you buy your life insurance, have an idea of who you’d want as your trustees before you start. If you want to put an existing policy in trust, you might need a financial adviser or a solicitor’s help and bear in mind that might cost.

Start by having a look at our all-you-need-to know info on trusts.

ttps://www.aviva.co.uk/insurance/life-products/life-insurance/put-life-insurance-in-trust/

I hope it helps

Thnaks

diystarter7

diystarter7 said:

Hi OP

Reading through your post and some good help here by others, I wish you luck
It is confusing and I'm only too aware about going around in "circles."

Good recommendations have been given, EG, think hard about what you are doing and I'm 101% with that

I understand your concerns and many other people like you.

As and alternative option that does not involve your property

Have you considered life insurance especially if you have an ongoing one to put in trust?  Starting a new one may/will be expensive given your age and reasonable payout IFA that came to our house discussed it as I was worried re care home fees (deprevation of assets) etc  and  NOT sure if it covers that but you can check  - It easy good read for a well-established insurance company below
(they recommended legal advice if you have an existing policy)

https://www.aviva.co.uk/insurance/life-products/life-insurance/put-life-insurance-in-trust/

quote

How to put your life insurance in trust

Your first step is to make sure it’s the right thing for you. Remember to get independent financial and legal advice before going ahead.

Otherwise, it’s usually a pretty simple process and can be done any time.

If you’re thinking of doing it when you buy your life insurance, have an idea of who you’d want as your trustees before you start. If you want to put an existing policy in trust, you might need a financial adviser or a solicitor’s help and bear in mind that might cost.

Start by having a look at our all-you-need-to know info on trusts.

ttps://www.aviva.co.uk/insurance/life-products/life-insurance/put-life-insurance-in-trust/

I hope it helps

Thnaks

Hi

Just thought about this.

Why not consider my earlier post and what you were already planning to do for a better peace of mind. However, personally, I would be very careful signing away even a part of where we lived unless you had alternative options.

Good luck

dottiec

Keep_pedalling said:

Inheritance tax is only a consideration if you are actually in IHT territory which sounds unlikely if you are worrying about deprivation of assets. If your share of the house is worth £175k or more your estate has exemptions of £500k (iif less than that then £325 + the value of your share). If you are a widower it can be double that.

I think this answers the question re my having to pay rent to my son if I assign him some of my third share.  It would seem this route would only come into play if we were in the inheritance tax bracket which we are not.  
Thank you for that.

DIY Starter 7 : I will look at life insurance but I think paying that at my age would be way beyond my means. 

I think it's probably time to see a solicitor as I need to take action whilst still fit and well.  I will report back on what they say but it might be in a couple of weeks.  I am very appreciative of the help I've received on here and definitely will not decide anything without first posting on here for any further views and I hope the information helps someone else.

diystarter7

dottiec said:

Keep_pedalling said:

Inheritance tax is only a consideration if you are actually in IHT territory which sounds unlikely if you are worrying about deprivation of assets. If your share of the house is worth £175k or more your estate has exemptions of £500k (iif less than that then £325 + the value of your share). If you are a widower it can be double that.

I think this answers the question re my having to pay rent to my son if I assign him some of my third share.  It would seem this route would only come into play if we were in the inheritance tax bracket which we are not.  
Thank you for that.

DIY Starter 7 : I will look at life insurance but I think paying that at my age would be way beyond my means. 

I think it's probably time to see a solicitor as I need to take action whilst still fit and well.  I will report back on what they say but it might be in a couple of weeks.  I am very appreciative of the help I've received on here and definitely will not decide anything without first posting on here for any further views and I hope the information helps someone else.

Hi
No worries and as i thought, may be too expensive but there was a chance you had an ongoing one that could have been sent to trust

Yes, your next step, good one

I hope it is all sorted out soon

Good luck

tooldle

Is this a reasonably large property? If your son is on a lowish income will he be able to manage the running and maintenance costs on his own? 

diystarter7

tooldle said:

Is this a reasonably large property? If your son is on a lowish income will he be able to manage the running and maintenance costs on his own? 

Hi

Good point and if I may add, is OP aware that is son falls into debt etc, gets married/divorced etc there may be implications

A lot to consider and IMO this is why there often a majority  consensus is not to give away, share a joint property if you have no back up

Thnaks