Sibling living in family home

shirleytch

I will try and keep this brief. 

My brother and I jointly inherited our parent’s home three years ago. He lived there with our parents for many years and acted as a carer for mum in her latter years.  He has continued to live there since mum passed away and probably plans to stay indefinitely.  He is on benefits and signed off from work due to long term health issues.  My circumstances have changed recently and I could do with extra income/capital.  There is no possibility of him buying out my share of the house.   Would it be possible for him to claim housing allowance if I were to charge rent for my 50% of the property?  It’s a two bedroomed house with is only him living there. I don’t know very much about benefits and bedroom tax etc.  I don’t want to cause him any stress if I can avoid it.  He suffers with anxiety. 

I wasn’t sure whether this belonged here or on the benefits thread.  

Thanks for reading

Brie

The best and fairest solution would be to sell the house and split the proceeds.  Hopefully with that he could buy a smaller home, possibly with a mortgage based on his benefit income.  As I understand it he would get more ££ as he wouldn't have to pay CGT (I think)

If that's a non-starter then I doubt you would be able to charge him rent as housing allowance where the property owner is a relative is apparently quite hard to get agreed.  Instead would he be willing to have a house mate and you collect the rent from that person?  

The only other alternative I can think of is, depending on your ages and your personal circumstances, is to investigate equity release.  Whether it would be possible for you to get that on your half leaving your brother's portion intact would be the crucial point.  Or whether it would have to be on a portion of both your shares of the house.

RAS

Selling the house now would incur a CGT liability on any increase in value since mum died, either to the estate if the property is still in mum's name or for you as non-resident. 

It's worth you working out whether he could buy somewhere smaller with half the capital? That could be done without risking his benefits.

Have you been to the house recently? My concern would be that 3 years after mum's death the property will be in decent condition. Does your brother have enough money to maintain the house for the rest of his life? Or would it be falling down round his ears?

Keep_pedalling

Do he would not be able to claim benefits to pay you rent.

Depending on your ages you might be able to free up some capital through equity release.

theoretica

Another alternative might be to get a lodger into the other bedroom?

swingaloo

RAS said:

Selling the house now would incur a CGT liability on any increase in value since mum died, either to the estate if the property is still in mum's name or for you as non-resident. 

It's worth you working out whether he could buy somewhere smaller with half the capital? That could be done without risking his benefits.

Have you been to the house recently? My concern would be that 3 years after mum's death the property will be in decent condition. Does your brother have enough money to maintain the house for the rest of his life? Or would it be falling down round his ears?

Is this not the same house that was transferred into your brothers and your name nearly 20 years ago?

RAS

That's what I just realised. Depending on when brother moved in they both face a substantial CGT liability and it's only going to get larger the longer they own the place.

RAS

theoretica said:

Another alternative might be to get a lodger into the other bedroom?

The OP would not be resident, so the person is the second room cannot be a lodger. And the OP need to comply with lots of regulation and taxes or risk fines etc.

The brother cannot be the LL to a lodger because he is in receipt of benefits and benefit fraud ain't  good idea.

Alderbank

It's not clear, but I think it is a separate house.

The house referred to back in 2015 was 'mother's house' which had been gifted to the siblings many years before (approx 2006) and which they were planning to sell. None of the family lived there.

This current house is 'the parents' home' and has been lived in by the brother and their parents for 'many years', during which time father and then mother died. The siblings jointly inherited this one in 2021

RAS

In 2015, mother had "now" moved in with the OP, whilst "her house" had been transferred to OP and brother. So mum was presumably resident at the OP's when mum died?

shirleytch

swingaloo said:

RAS said:

Selling the house now would incur a CGT liability on any increase in value since mum died, either to the estate if the property is still in mum's name or for you as non-resident. 

It's worth you working out whether he could buy somewhere smaller with half the capital? That could be done without risking his benefits.

Have you been to the house recently? My concern would be that 3 years after mum's death the property will be in decent condition. Does your brother have enough money to maintain the house for the rest of his life? Or would it be falling down round his ears?

Is this not the same house that was transferred into your brothers and your name nearly 20 years ago?

Apologies for the confusion I have caused here.  This does indeed refer to the house I referred to on a much earlier post.  It was mum’s home and she transferred it into our names a long time back.  I wrongly said inherited here to keep things simple.  My brother lived with mum for many years and cared for her towards the end of her life.  We own the house equally.  I appreciate all the comments here and know I will have a CGT liability.  This does not apply to him as he has never owned another property.  I guess I need to leave things as they are I guess or have a difficult conversation with him.  He would not be open to a lodger.  In terms of maintenance he is looking after the property but there have been some bodge jobs going on which does concern me.  

Thanks all