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Difficult situation

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  • MEM62
    MEM62 Posts: 4,752 Forumite
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    Hanko2983 wrote: »
    The best option would be for my MiL to sell and we move out, then gift us the money. Only problem would be we have 2 small children and nowhere to live.

    Then you will have to rent for a while. It is unlikely that the sale of you MIL's house and the completion of your purchase could be times for the same day. And even if planned that way, thing do go wrong.

    You only way of ensuring a roof over your heads in the interim period is to rent.
  • Mgman1965
    Mgman1965 Posts: 249 Forumite
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    Aylesbury_Duck wrote: »
    Not more difficult, more complicated. Look at the processes that have to be gone through in a house purchase. If you were to go down the route of taking ownership of the house you currently rent, essentially you would be purchasing the house from your MIL. That's not just a case of her writing a letter gifting it to you.

    I'll try asking a third time because you're either missing the question or being evasive: Is your MIL currently declaring the rental income from your tenancy and fulfilling her other obligations as a landlord?
    I think we can safely assume the rent is undeclared to HMRC then and is a cash in hand transaction.
  • Aylesbury_Duck
    Aylesbury_Duck Posts: 13,993 Forumite
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    Mgman1965 wrote: »
    I think we can safely assume the rent is undeclared to HMRC then and is a cash in hand transaction.
    You’re probably right, hence the immediate cessation of responses when pressed on it. If so, it puts the OP and his MIL in an interesting position. He wishes to avoid paying one form of tax (stamp duty) but his preferred route to achieving that might lead to questions being asked about possible tax avoidance by his mother in law.
  • dimbo61
    dimbo61 Posts: 13,716 Forumite
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    edited 4 January 2018 at 8:50PM
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    If we put the whole question about paying tax on rental income and Landlord responsibility to one side at the moment.
    If the figures add up could you afford to buy the new property with the £30,000 inheritance from your gran as the deposit and your income ?
    Have you saved some money yourself ?
    Is the house your are living in now ready to go on the market ? Will it sell quickly ?
    Could you look at an offset mortgage and pay the lump sum into the offset savings she has promised once she has sold the house !
    If you could get a 2 year fix and offset you would have a new home and money in the bank ��
  • Hanko2983
    Hanko2983 Posts: 12 Forumite
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    Hello,

    I can confirm my MiL does declare our rent to HMRC. She's an OAP and retired. I'm sorry if you presumed I was evading your questions but my MiL's tax is not my business. We've been privately renting and living with her while she has been very unwell and also going through a divorce.

    She has since had a settlement from the divorce and has now moved into a new property.

    She would like to sell the house we are in, gift us the money plus the £30k from my grandmother a purchase a new house.

    We are well aware of the capital gains tax.

    What I have been trying to establish is the process of MiL selling the house, gifting us the money, and us buying a new house all in "a chain". Estate agents we have spoken to have all said it wouldn't be a problem but just wanted to check to see if anybody on here would be familiar with this type of scenario?

    Many thanks.

    We have decided
  • bouicca21
    bouicca21 Posts: 6,514 Forumite
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    How many times do you want to be told the answer? It isn't straightforward, it is a problem.
  • davidmcn
    davidmcn Posts: 23,596 Forumite
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    bouicca21 wrote: »
    How many times do you want to be told the answer? It isn't straightforward, it is a problem.

    Not sure it's all that much of a problem - unlike a "standard" tenant, the OP is actually a party in the chain, so obviously has an interest in allowing vacant possession, as they're moving too on the same day.
  • Hanko2983
    Hanko2983 Posts: 12 Forumite
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    Exactly, thank you for your understanding. I really don't think that is ging to be an issue as we are family and would be moving on the same day. It's the financial aspect that I'm interested in. The transfer of the funds from the buyer to my MiL to us as cash gift and then us on to our seller?
  • davidmcn
    davidmcn Posts: 23,596 Forumite
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    Hanko2983 wrote: »
    Exactly, thank you for your understanding. I really don't think that is ging to be an issue as we are family and would be moving on the same day. It's the financial aspect that I'm interested in. The transfer of the funds from the buyer to my MiL to us as cash gift and then us on to our seller?
    Again, can't really see a problem assuming that your MiL and you use the same solicitor.
  • Voyager2002
    Voyager2002 Posts: 15,285 Forumite
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    Why don't you see a solicitor? As others have posted, in your situation there is rather a lot that could go wrong...
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