I live in my parents 2nd property, will I have to leave?

Barmy76

I live in a house that belongs to my foster mum but is not her main residence. I dont pay rent or have a tenancy agreement.  If she dies will the house I live in count towards inheritance tax?   Both houses together would be worth more than 500k 

Flugelhorn

much depends on what she states happens to her estate in her will - do you know what it says, has she ever said anything? 

re IHT it could be that if you were left the house then there would be enough money in the rest of the estate to pay for it - who knows

Barmy76

I am a foster daughter so the house will be left to her son.   However as I live here I dont know if my house will count towards inheeritance tax

Grumpy_chap

Barmy76 said:

I live in a house that belongs to my foster mum but is not her main residence. I dont pay rent or have a tenancy agreement.  If she dies will the house I live in count towards inheritance tax?   Both houses together would be worth more than 500k 

Barmy76 said:

I am a foster daughter so the house will be left to her son.   However as I live here I dont know if my house will count towards inheeritance tax

If you live in the house as an independent adult, then your Foster Mother has taken care of you while alive beyond the limits she would be obligated to as a Foster Carer.  Assuming you mean Foster Mother and not Adopted.
So, she must have formed a level of affection / care towards you that extends beyond the minimum requirement.
She might have made some provision for after her death and her biological Son might expect that to be the case.
Do you know for certain that she will leave the house to her biological Son?
Has some event prompted you to think about this eventuality now?
Have you ever discussed the matter with your Foster Mother?

Keep_pedalling

Her estate will have at least £500k in exemptions and if she was a widow then up to double that. Whether you have to leave or nor depends on what her son wants to do with the house once he inherits.

lincroft1710

You may not think it appropriate, but you really do need to discuss your position with your foster mother. As you have no tenancy and appear not to be a beneficiary, you could easily be evicted if she dies and her son inherits

lr1277

Yes it will be counted towards calculation relating to inheritance tax.

Whether IHT is payable depends on your foster mum's circumstances and if she has a will and how that is structured.

You mentioned 2 houses; your foster mum's main residence and the property you are living in.

It depends if there is a will. If there is a will, she may have left you something in the will. Might not be the house but the right to live in it till you move out or die. Or she might have left you the house. Or she could have left both properties to her son.

If there is no will and she dies intestate, whoever is managing your foster mother's affairs, will have to divide the assets according to intestacy rules. But potentially both properties could go to her son. In which case if you and he want you to continue living there, you will have to have a conversation with the son about him becoming your landlord. Whether he wants to be a landlord or not is upto him.

As said above, you need to have a conversation with your foster mother. Sorry to sound horrible, but I have seen a few cases on these boards where an elderly relative promised something to somebody and either no will was written in which case intestacy rules apply or there was a written will but no mention of the promised action. Basically, somebody who thought they were going to get something got nothing. So be ready to move out. Sorry.

Edited to add: Whether there is a will or not, it is possible one of the properties might have to be sold to pay the IHT. Again it depends on your foster mother's circumstances and if there is will, it will depend on how the will is written.

itsthelittlethings

I don't see why it wouldn't count towards the estate.

madbadrob

The answer to ther question is Yes both houses will count to IHT.  The other answers you have had really make no sense to me as you didnt ask if you would have to leave it.  Not sure why you would think that it wouldnt be included but that as nothing to do with me

JGB1955

madbadrob said:

The answer to ther question is Yes both houses will count to IHT.  The other answers you have had really make no sense to me as you didnt ask if you would have to leave it.  Not sure why you would think that it wouldnt be included but that as nothing to do with me

The title of the post asks 'will I have to leave?'.

Marcon

Keep_pedalling said:

Her estate will have at least £500k in exemptions and if she was a widow then up to double that. Whether you have to leave or nor depends on what her son wants to do with the house once he inherits.

Not necessarily (and nit picking!). Her own allowance will be the usual £325K + 'up to' £175K in respect of her main residence only. If the main residence is worth less than £175K, then it will be £325K + the value of the main residence.

The second property will be counted in full for IHT purposes.

As you say, if she was a widow and her late husband didn't use any of his nil rate bands, that allowance could be doubled - but again, only the main residence is allowable for the residence nil rate band.