2 Self Builds on 1 plot with family

selfbuildnoob

Hi, I'm after some advice regarding a project that I'm about to embark upon, I have inherited half a property and in process of buying the other half.

Property has:
- Run down house
- Barn (previously used for business, changed to storage for last 15 years)
- Shared access to both
- Utilities to both

My end goal is to knock all buildings down and build a bungalow for Mum where the barn is and house for my family where the original house was which will result in 2 separate properties.

- I will own the whole property out right with my husband once my current house is sold.
- Mum has own house with no mortgage which will be sold to help fund project

We want to club all our money together to achieve this once in a lifetime project and this is where I need help.

What is the best way of dealing with:
- Finances from mum
- The land with regards to splitting the deeds or shared ownership and when to do so
- Gifting - land/money

There is a lot of info online about gifting land/property to children & grandchildren but not the other way around, would it be beneficial to gift my Mum a section of land for her to do her own self build?

Ultimately I am an only child so will inherit Mums property in the long run but want to avoid inheritance tax, capital gains tax & stamp duty if possible.

So if anyone can help or give me advice on the best route to take that would be much appreciated!

user1977

selfbuildnoob said:

would it be beneficial to gift my Mum a section of land for her to do her own self build?

Rather confusing terminology - doesn't sound like a "gift" if she's putting in a chunk of money?

RAS

Who is selling you the other half of the land?

selfbuildnoob

user1977 said:

selfbuildnoob said:

would it be beneficial to gift my Mum a section of land for her to do her own self build?

Rather confusing terminology - doesn't sound like a "gift" if she's putting in a chunk of money?

If we gifted her the land she wouldn't be 'putting in a chunk on money' as she would use that money to build her own self build, anything left over would be used for our build.

selfbuildnoob

RAS said:

Who is selling you the other half of the land?

A family member who is executer to will, transfer of ownership

Section62

selfbuildnoob said:

....
What is the best way of dealing with:
- Finances from mum
- The land with regards to splitting the deeds or shared ownership and when to do so
- Gifting - land/money
....

A key issue with self-builds is where you live while the build happens - if you've got the funds to finance the build whilst living in your current home then it is much easier than living in a caravan on-site.  For some people living in a caravan for an extended period of time is simply not an option.

So are you planning to live in your current home until the new one is ready, and if so, can you finance the build without selling mum's bungalow first?  If not, have you got space for her to live with you?

RAS

selfbuildnoob said:

RAS said:

Who is selling you the other half of the land?

A family member who is executer to will, transfer of ownership

So what is your relationship to the other beneficiary?

selfbuildnoob

Section62 said:

selfbuildnoob said:

....
What is the best way of dealing with:
- Finances from mum
- The land with regards to splitting the deeds or shared ownership and when to do so
- Gifting - land/money
....

A key issue with self-builds is where you live while the build happens - if you've got the funds to finance the build whilst living in your current home then it is much easier than living in a caravan on-site.  For some people living in a caravan for an extended period of time is simply not an option.

So are you planning to live in your current home until the new one is ready, and if so, can you finance the build without selling mum's bungalow first?  If not, have you got space for her to live with you?

Yes but other way round, we live in existing house whilst bungalow is built then move into bungalow whilst house is being built

selfbuildnoob

RAS said:

selfbuildnoob said:

RAS said:

Who is selling you the other half of the land?

A family member who is executer to will, transfer of ownership

So what is your relationship to the other beneficiary?

Auntie - Niece

Albermarle

selfbuildnoob said:

user1977 said:

selfbuildnoob said:

would it be beneficial to gift my Mum a section of land for her to do her own self build?

Rather confusing terminology - doesn't sound like a "gift" if she's putting in a chunk of money?

If we gifted her the land she wouldn't be 'putting in a chunk on money' as she would use that money to build her own self build, anything left over would be used for our build.

But you already said I will own the whole property out right with my husband once my current house is sold.

So she would fund a self build property but you would own it ?

You mention inheritance tax but do not forget about Deprivation of assets, if she should ever need significant care, costing a lot of money.

selfbuildnoob

Albermarle said:

selfbuildnoob said:

user1977 said:

selfbuildnoob said:

would it be beneficial to gift my Mum a section of land for her to do her own self build?

Rather confusing terminology - doesn't sound like a "gift" if she's putting in a chunk of money?

If we gifted her the land she wouldn't be 'putting in a chunk on money' as she would use that money to build her own self build, anything left over would be used for our build.

But you already said I will own the whole property out right with my husband once my current house is sold.

So she would fund a self build property but you would own it ?

You mention inheritance tax but do not forget about Deprivation of assets, if she should ever need significant care, costing a lot of money.

Hence why I'm asking advice to see if its better to gift her the land so she can fund her own self build