Tenants in common and iht

Emmalouise18

A friend asked me to not take on any work, to give up my home and be a companion and care for him and eventually marry in return he would buy a house and give me half as tenants in common. 

Firstly does this come under pre owned asset, I’ve asked a 2 solicitors advice and s financial services advisor but none appear to be able to answer me.
the second problem now if that he is terminally ill and is leaving his half of the property to his niece, he wants to add a condition that she is not to sell the house until whoever owns the other half is ready to sell it, mostly due to the fact that half a house is almost impossible to sell and the value would be lost . 

I will continue to live there on his death as I own half and it’s my home.
He was married previously and his wife passed without using her iht allowance . 

Can anyone tell me what tax if any would be due in his death and secondly what will my children have to pay when I die ? The half of the property was £215000 when purchased and I have very little other assets 

Keep_pedalling

As a widow his estate can claim his wife’s unused NRB so his estate would need to exceed £650k before any IHT was due.

What he is proposing with his will would create an immediate post death interest trust, the trust would be the legal owner of the half of the house which will eventually go to his niece and you would be the beneficial owner of the whole house. Unless you marry or become civil partners this would create an IHT liability on your estate, so he really should keep his promise about marrying otherwise his niece and your beneficiaries will inherit less.

He should make sure he uses a STEP qualified solicitor to make his will.

sheenas

No expert , but if he gives you half the house prior to marriage, then you would be liable for the tax on the gifted amount. Marriage then gifting would avoid that situation. The other consideration is that his niece and you would eventually own half a house. If either party needed to sell and the other didn't how would that be resolved.

silvercar

sheenas said:

No expert , but if he gives you half the house prior to marriage, then you would be liable for the tax on the gifted amount. Marriage then gifting would avoid that situation. The other consideration is that his niece and you would eventually own half a house. If either party needed to sell and the other didn't how would that be resolved.

No tax on gifts, so he can give what he likes. If not married it’s a potential exempt gift in that if he died within 7 years it would fall back into his estate (at least in part). It’s the estate that has a potential tax liability, though that can mean the property needs to be sold to pay for it. It seems that the will would be written in a way that you would have the right to live in it as long as you need, so the niece would have to wait to receive the inheritance.

Albermarle

Apart from any tax implications, this seems a big step. 

A friend asked me to not take on any work, to give up my home 

Can you expand on the phrase in italics.

Do you own a house? with a mortgage? on your own? Do you want to give it up?

and be a companion and care for him and eventually marry

Do you want to spend the next unknown number of years in a caring role?
Do you want to marry him ???

p00hsticks

I'd be wary of the 'eventually' word - I'd want the marriage to take place before giving up my home and taking on the role of carer. 

And bear in mind that any will made prior to a marriage will become invalid once the marriage takes place unless (in my undertanding)  the will specifically states that it is being made in contemplation of the marriage.       

Emmia

Albermarle said:

Apart from any tax implications, this seems a big step. 

A friend asked me to not take on any work, to give up my home 

Can you expand on the phrase in italics.

Do you own a house? with a mortgage? on your own? Do you want to give it up?

and be a companion and care for him and eventually marry

Do you want to spend the next unknown number of years in a caring role?
Do you want to marry him ???

OP Is your friend also paying you something for the caring work? Or is the remuneration based entirely on the value of the property you might eventually inherit? So you'd be effectively working for free until that point... 

I fear this could go wrong, for you. So I'd proceed only with an abundance of caution.