Buying my parents house UNDER market value.

lily-what-_knot

Sorry new to site, and probably doing this all wrong, but can someone help with there opinion.
My husband as one brother who at aged 50 lives with mum and dad still. Mum is worried that if anything happens to them (mum & dad) and the estate as to be split, the house will have to be sold as at 50 he would not be able to get a mortgage to pay my husband his share of the estate. and HE DOES NOT WANT TO MOVE, HE WANTS A FOUR BEDROOM HOUSE? why we do not know?
So Last year in January 2007, they had the house valued at £285.000, My Husband as three children and a £100.000 grand mortgage. And of late as a self employed builder as been finding things tight. His brother on the other hand as no family and no mortgage, he does not even pay rent and he also gets a live in carers allowance, as mum and dad are both registered disabled.
When my husband does most of the caring.
But anyway mum and dad decided that it would be better to sign the house over to the son who lives with them and in turn give my husband £140.000.
Hence my husband then does not inherit the house when they die. This as been going on now since January 2007, my husbands brother as been realy dragging his feet, and since the 6 dec 2007 his soliciter as suppose to be getting his name on the deeds, it is now in the hands of the land registry apparently, and then it as to go to the tax people. Then when he is notified that it is all complete he can then get a mortgage for the amount he needs to pay his mother, ie: for the house? So she in turn can give it to my husband. My husband knows in the long run that his brother was getting a good deal and just wanted out of the whole inheritance bit, but now we feel his brother is dragging his feet and every month he does not have to pay a mortage, my husband is getting more and more in debt. What does anyone think of this situation? Would you go ahead? Now that his name is on the deeds of the house what would happen if my husbands parents died, would he not get his inheritance? thanks for reading my thread it must of been boring, but i would love to get someones advice. x lily-what-knot

56cheffy

lily-what-_knot wrote: »

Sorry new to site, and probably doing this all wrong, but can someone help with there opinion.
My husband as one brother who at aged 50 lives with mum and dad still. Mum is worried that if anything happens to them (mum & dad) and the estate as to be split, the house will have to be sold as at 50 he would not be able to get a mortgage to pay my husband his share of the estate. and HE DOES NOT WANT TO MOVE, HE WANTS A FOUR BEDROOM HOUSE? why we do not know?
So Last year in January 2007, they had the house valued at £285.000, My Husband as three children and a £100.000 grand mortgage. And of late as a self employed builder as been finding things tight. His brother on the other hand as no family and no mortgage, he does not even pay rent and he also gets a live in carers allowance, as mum and dad are both registered disabled.
When my husband does most of the caring.
But anyway mum and dad decided that it would be better to sign the house over to the son who lives with them and in turn give my husband £140.000.
Hence my husband then does not inherit the house when they die. This as been going on now since January 2007, my husbands brother as been realy dragging his feet, and since the 6 dec 2007 his soliciter as suppose to be getting his name on the deeds, it is now in the hands of the land registry apparently, and then it as to go to the tax people. Then when he is notified that it is all complete he can then get a mortgage for the amount he needs to pay his mother, ie: for the house? So she in turn can give it to my husband. My husband knows in the long run that his brother was getting a good deal and just wanted out of the whole inheritance bit, but now we feel his brother is dragging his feet and every month he does not have to pay a mortage, my husband is getting more and more in debt. What does anyone think of this situation? Would you go ahead? Now that his name is on the deeds of the house what would happen if my husbands parents died, would he not get his inheritance? thanks for reading my thread it must of been boring, but i would love to get someones advice. x lily-what-knot

Hi Lily..I can't help but you might be better off starting a new thread, you might get a better response.

iloveegypt

i want to buy my parents house for £55000 under market value pay off their small mortgage £50000 and then they live there for free,their property is £120000 we have a small mortgage ourselves on our own house, is this legal and is this possible?
please reply!

thequant

iloveegypt wrote: »

i want to buy my parents house for £55000 under market value pay off their small mortgage £50000 and then they live there for free,their property is £120000 we have a small mortgage ourselves on our own house, is this legal and is this possible?
please reply!

To you and the original OP, what you are wanting to do is unethical. its nothing to do with releasing the inheritance, it's stopping the taxman getting his hands on the money when they become old and infirm and need looking after by the state because their money grabbing children can't be bothered.

for those who might take exception to this, if everyone does this, then the state picks up the care bills for these people, when i say "state" I mean ME & YOU. IF these people really care about their parents & inheritance, then they will look after them and support in their old age so they dont have to go into a care home.

hazyjo

Might have been better to start a new thread... I just read most of the above before realising it had been dug out from 2008!

Jx

00ec25

iloveegypt wrote: »

i want to buy my parents house for £55000 under market value pay off their small mortgage £50000 and then they live there for free,their property is £120000 we have a small mortgage ourselves on our own house, is this legal and is this possible?
please reply!

I have ignored the OP post as it is over 3 years old

yes its legal - how possible it is depends on whether you have the money or can get extra mortgage to pay them - we don't know

re stamp duty
- are you saying the full, non discounted open market value is £120k?
- you are classed as "connected persons" (ie you are related)

the stamp duty threshold is £125k, over this and you have to pay SD in which case the SD would be based on the open market value not whatever you pay your parents. Given you are very close to the threshold you will need cast iron evidence to support your valuation otherwise HMRC will decide the value for themselves and charge you SD based on their valuation,. Youir evidence would typically be at least 3 written valuations from 3 separate EA who will probably charge you for doing this as you have no intention to sell so they have no prospect of getting paid unless they charge you now

re IHT
because your parents will live there for free it is a "gift with reservation" irrespective of the fact you paid for it (full market or discounted price) therefore it will remain as part of their estate and subject to IHT if the value of their estate is oveer the IHT threshold at the time of death

re care
there is a rule called "deprivation of assets", this is a highly emotive area (post#35 ) where there is no consistent legal position - each councvil operates differently and there is no defined timelimit for when the house transfer is no longer considered to be part of the parents wealth for means tested benefits or care home fees - google it, especially on the ageUK website

The_Blue_Hatter

If the house is worth 350k, tell your parents i'll give them 260k and they can rent it from me

Gwhiz

hopeless_case wrote: »

BLuejake the parents want to sell the house to him everyone else is happy with it, what is your problem? they dont have one so why do you?

I think it's his "wrong time of the month"!