# Legal advice welcome! Re property



## MEES (Apr 20, 2006)

This is our situation
Both 70+ good health
We own a 4 bed farmhouse with a a detached granny annex. ( 2 bed )
Daughter 30 and son in law plus 2 grandsons live in house
We live in barn ( when not off in motor hone )
One acre of gardens maintained by husband and son in law.

Daughter and family have lived rent free but share bills for 4 years whilst she trained as a nurse. Her husband has a decent job but nursery fees were £1500 a month !

What do we want to achieve.?
We want them to be able to live in the family home when we pass on.

We have 3 sons all much older and well settled with good incomes, large homes, and rental properties.

Daughter wants to buy a share of the property

What does the will say?
50 percent to daughter. Other 50 percent split between all four. ( the joys also inherit from their own father)

Daughter jointly owns a rental paid up in 6 years with son number 3
Son law has a rental just paying the mortgage with £40 equity.
They view their rentals as their pension plans.

Property currently worth £800,000 freehold.

Any advice???


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## Revise (May 13, 2012)

Sounds like a bit of a minefield. I am willing to help. Leave it all to me. :wink2::wink2::wink2:

Their you go. all your problems solved. :laugh:

Easy....


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## nicholsong (May 26, 2009)

Margaret

At the end of the day before you do anything you will eed a good lawyer and tax expert - maybe the same person if you are lucky.

I am a lawyer but neither a Property Lawyer nor a Tax expert and Tax changes annually. I have just spent a short £2k on advice for my own affairs.

However i think that at the moment you are loooking for advice about the family situation, although decisions for all of you might be influenced by the legal/tax situation.

Prior to that I think you should clarify some points in the info you gave before the question, so that you can also give a clear brief, not only on here, but to professional advisers.

Firstly, in your first para you mentioned 'Farmhouse', 'Granny Annex' and 'Barn' - are there 3 parts of the property or are the latter two mentioned the same?

I assume you want to stay in residence till both of you pass on. So why oes your daughter want to buy 50% now.

You talk about 'The Will' in the singular. Have you not both got Wills? What happens after the demise of the first of you, and then the second? I presume you have both left the estate to the surviving spouse, which would be free of IHT.

Unless the reason for daughter 'buying' is to give you cash, then you should think of giving her 50% of the property, but it would be a gift in reservation for IHT purposes, and subject to tax in first 3 years but tapering for the remaining 4 years of the 7. But she would be liable for IHT anyway. 

I hope I have given you enough insight to convince you that you should seek professional help, because there could be consequences beyond what you have thought about and what I have illustrated.

Margaret, if you want to PM me please do.

Geoff


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## peribro (Sep 6, 2009)

You need to take professional advice from either a solicitor who has knowledge of this area or a tax accountant.


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## Bobmarley3 (Oct 12, 2011)

> We own a 4 bed farmhouse with a a detached granny annex. ( 2 bed )


Something else to consider. Are there any planning restrictions which would prevent the house being owned by different people to the annexe? Where I live I know the planning authority (a national park) has made life awkward for some people by saying that both properties must be in the same ownership and not sold off or otherwise disposed of separately.
MrsBob


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## Glandwr (Jun 12, 2006)

I would choose one of your children as the executor of your will and confide your intentions with them.

Dick


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## MEES (Apr 20, 2006)

We intend to seek professional advice from layer and account and but was trying to get my head an. Hit straighter first! The house and barn / annex are considered to be all part of same property though there is about 12 ft between the two. Only one council tax ( thank god)
If she were to buy part of property it would be of the whole property.

Her concern is that if the will remains as per and we last ( hopefully) another 20 years then she would not be able to buy her brothers out and loose her home.

We thought that we could gift some of the proceeds from such a 'sale,' to sons now to reduce her liabilty to them hope that makes sense

Matching wills and trust onward to kids. If that makes sense.
Youngest son and daughter in law are executors ( she is a tax accountant) we have discussed the idea in principal with them and with one of our other sons ( the eldest is in America very wealthy and little contact)


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## HermanHymer (Dec 5, 2008)

One point to be sure on... that the offspring are all on the same page. 

Are the better off offspring happy with the disposal ratios? Some MAY think that the fact that even though they've achieved more in their lives, they should still be entitled to "their slice". Perceived favouritism to one heir could cause conflict between them down the line.

Many families have one who's done better than the others. He or she may or may not want an inheritance. In turn the partner may NOT agree. So that is a potential conflict situation too. There's often one that has NOT succeeded in life and parents may want to compensate and equalize. 

Just be sure your tenure is rock solid for as long as you want it to be, and allow for future growth/shrinkage of the assets which you intend to depose in your will/s. As you could say that could be 20 years down the line, or tomorrow (DV not so). A will should be formulated on today's circumstances but re-evaluated on an annual basis for ongoing relevance changes in circumstances. (e.g. well off offspring could be bankrupted, or taken to the cleaners in a divorce). 

Full disclosure and agreement all round is critical. Explain your thinking, hear their views. In the end it's your money and you can leave it to the cats' home if you wish.


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## MEES (Apr 20, 2006)

It's a ------minefield I know and chances of all eight partners being on the same page is a miracle but doing nothing and leaving it to the will/ inheritance taxation does not seem an option either :-(
Hoping some others have faced similar and come up with solution/ advice.
This is a fantastic forum
Margaret


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## aldra (Jul 2, 2009)

Unfortunately it doesn't usually work out that those in the family that are wealthiest are willing to take a back seat when it comes to inheritance !!

I guess that's why they are wealthy in the first place

We have made direct provision for our grandchildren mainly because of the age range, they will share 50% of our inheritance directly, although we may guesstimate in the case of the older ones who may benifit from the money sooner than our death 

It isn't a popular decision with all of our children but I've given up trying to please them all

Sandra


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## suedew (May 10, 2005)

For once am glad I have no property and little to leave, sons just say spend it mum you worked hard for it. One I have helped out most requeted that I leave anything left to his brother or just between all the gandchildren or a mixture of both.
Neither are at all wealthy in anything other than love and good nature.


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## Matchlock (Jun 26, 2010)

suedew said:


> For once am glad I have no property and little to leave, sons just say spend it mum you worked hard for it. One I have helped out most requeted that I leave anything left to his brother or just between all the gandchildren or a mixture of both.
> Neither are at all wealthy in anything other than love and good nature.


I feel the same, my in laws are not short of a bob or two but as I told the FIL you have worked for it, just enjoy ( they are both in their mid 80,s and take lots of Hols) mind you the BIL is a totally the opposite way but he is from Rotherham.
Myself and the wife are worth around 1/2 a million but by hell we will make the most of it whilst we can, anything left after we are gone will be split between our sons but I wont care anymore.


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## nicholsong (May 26, 2009)

Matchlock said:


> Myself and the wife are worth around 1/2 a million but by hell we will make the most of it whilst we can, anything left after we are gone will be split between our sons but I wont care anymore.


I feel the same; worth a bit more, but it is mostly bricks and mortar in London, but could be sold. I would want to leave a good chunk for Basia, as she had been scraping most of her life till I came along.

Just do not know how to spend it here as we are living in a substantial house with large garden and eat and drink what we want and go out when we want, but without being able to get away from here more, it is difficult to know how to spend it - frustrating when one is already 74.

I have toyed with 'upgrading' the MH, but cannot find anything to substantially beat te Arto which has only done 39,000 miles and the new layouts with separate toilets and showers need an extra 1m length to get the same living area, which does not suit small lanes, ferries etc.

We keep inviting friends but somehow they never make it to Poland, except MHF JanHank(living not far away) and HurricaneSmith.

Maybe we have to advertise an Open House Champagne Party:laugh:

Geoff


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## icer (Dec 11, 2006)

If the house is worth £800k, do you have equal shares?
If so then each own £400k
At present nil rate band is £325k increasing to £425k in 17/18 tax year when matrimonial home is passed on to decendants.
You would both be giving £200k each to your daughter
In order for taper relif to come into effect the amount given would have to be in excess of NRB

this is a link to current situation with nrb at £325k
http://moneytothemasses.com/tax-advice/inheritance-tax-iht-taper-relief-on-gifts-explained

This is the proposed 17/18 with the enhancements.

To qualify for the enhanced NRB:

The estate must include a residential property 
The individual, or their spouse or civil partner, dies after 5 April 2017
If there is more than one residential property in the estate the family can nominate one to qualify
The property has to have been a genuine home of the deceased - buy-to-let for example would not qualify
The property must be left to a direct descendant or lineal descendant, although a property left jointly to a descendant and their spouse may qualify
Assets and property left in trust will not qualify unless the only beneficiaries are direct descendants and the terms give them at least a life interest. Some special trusts may qualify.

I would seek professional advice, as has been said, it is a minefield. There is also a question as to HMRS's interpretation as to whether you can still call it your matrimonial home.

I had a gift disallowed as it did not exceed NRB and no taper relief was given and the estate was charged at 40% because it was less than 7 years.

Ian


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## Matchlock (Jun 26, 2010)

Mmm hadn't thought about the house, always considered it a home rather than an asset, something else to consider!


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## suedew (May 10, 2005)

Geoff you might be sorry about that invite, we have pencilled in Poland as one of our places to visit this year


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## MEES (Apr 20, 2006)

Ian THANKYOU so much for this it follows nicely from Geoff messages to me.

I do not quite understand the last paragraph . Does it mean you have to give away more to avoid I tax ?

Our daughter and family have been living with us for 5 yrs to date so now she is working and the boys are in school she feels she wants to secure their future situation in the house.

Naturally so do we!!

I am not seeking free advice really but trying to get my story a bit straighter before going to see a lawyer.
Thanks to everyone
Margaret


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## aldra (Jul 2, 2009)

nicholsong said:


> I feel the same; worth a bit more, but it is mostly bricks and mortar in London, but could be sold. I would want to leave a good chunk for Basia, as she had been scraping most of her life till I came along.
> 
> Just do not know how to spend it here as we are living in a substantial house with large garden and eat and drink what we want and go out when we want, but without being able to get away from here more, it is difficult to know how to spend it - frustrating when one is already 74.
> 
> ...


It depends Geoff

Are we we classifieds as friends ?

Friends you would like to meet

Think carefully

I drink too much it seems

But I am a fairly good cook even when drunk

If we live long enough

We me yet meet

Sandra


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## aldra (Jul 2, 2009)

Actually

I feel really miserable 

Im so completely hopeless when travelling 

But I blame the houndfromhell hell

He's a pain

I need to drink to ease the pain in the the joints 

When traveling 

Sandra


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## icer (Dec 11, 2006)

Margaret,
I only know this from personal knowledge.

I myself was under the impression that the gift I received would be subject to taper relief and would write down untill 7 years had passed and liability was nil.

Wrong, in this tax year for example any gift (over £3k to kids) from an individual would be taxed at 40% if given within 7 years if estate (once again individual) exceeds £325k and the gift is not in excess of £325k. And payable by the Donee. If said gift is in xs the excess is tapered in accordance with the write down rules. example 3 in the link I gave you.
Your estate is not just your house either. 

It is complicated and you do need advice for what you are proposing

Ian


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## aldra (Jul 2, 2009)

True

We give multiple gifts of £250 each year 

But remember we have far too many kids and grandkids 

And the gifts work out as plenty

There's 16 of them including grandkids 

>So we rest ok>>

Sandra


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## patp (Apr 30, 2007)

I am always confused as to the best people to advise us on these matters. Is it a Financial Planner or an Accountant? If our assets are fairly simple, would our bank be able to advise us?


How much do we pay out to these people in order to save a bit?


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## aldra (Jul 2, 2009)

Gifts are simple 

£3000 a year to one 

A marriage gift when appropriate 

And as many £250 gifts as you wish 

Gifts of larger multiple amounts , stepped down over seven years

If you live 7 years then no inheritance tax 

So

Are you feeling lucky ??

Sandra


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## nicholsong (May 26, 2009)

aldra said:


> Gifts are simple
> 
> £3000 a year to one
> 
> ...


I did not know you are that rich Sandra.

But what does Albert get?


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## aldra (Jul 2, 2009)

I'm fine Geoff 

Albert gets it all if I die first

Against my better judgement >>

But he promises to pass it on to the kids

And joking apart 

It's really important to me 

That it goes to them

I always worried me that if I died he might remarry and our kids wouldn't get my money

But he's an old git now 

And like he says 

He's been there seen it done it>>

So it's ok

Sandra


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## aldra (Jul 2, 2009)

Ps

He got me

What else would he have needed??> > 0
Sandra


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## HermanHymer (Dec 5, 2008)

Sandra, dont overlook the fact that he's the best chippie west of the Pennines!


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