Buying house off parents - Need some advice

Cabbagetower

Hi all, 

Following the death of my grandmother my parents inherited one of her two properties. She died a number of years ago and the house remains in her name. The entire estate isn't above the IHT threshold and no IHT is owed. 

We are considering purchasing the house from them at below market value, and renovate it to live in for a few years. Then potentially rent it out at a future date. We will require a mortgage. We are first time buyers with no other properties and healthy savings. 

I want to find out what options are available for us to purchase the house from them with the least tax and/or legal fees for both parties. 

Please ask any additional or clarifying questions. I don't know what I don't know. 

Thanks,
C

Mark_d

Buy the property on mortgage for an agreed price that's less than the stamp duty threshold.  It should be a fairly simple sale.  There's the added complication that the property is in your grandmother's name, but the paperwork your parents have should help resolving this issue.

Keep_pedalling

If the value of the house has increased since your GM dies then there is likely going to be a CGT liability for your parents, although I don’t know if that will be effected by the house still sitting in the estate.

How long ago was the death, who were the executors?

Cabbagetower

@Keep_pedalling

Thanks for your response. My grandmother died in 2020, and the executor was my uncle.  

Mark_d

Keep_pedalling said:

If the value of the house has increased since your GM dies then there is likely going to be a CGT liability for your parents, although I don’t know if that will be effected by the house still sitting in the estate.

How long ago was the death, who were the executors?

CGT could be mitigated by the @Cabbagetower purchasing at below market value.

Olinda99

no it couldn't - from a cgt point of view the market value not sale value would be used.

Keep_pedalling

Mark_d said:

Keep_pedalling said:

If the value of the house has increased since your GM dies then there is likely going to be a CGT liability for your parents, although I don’t know if that will be effected by the house still sitting in the estate.

How long ago was the death, who were the executors?

CGT could be mitigated by the @Cabbagetower purchasing at below market value.

Buying from connected person’s means it is based on market value. The executor however has not transferred the property to the beneficiaries which means any CGT due is owed by the estate not the parents so I am not sure if that no longer applies.