Equity release on a relatives house
Discussion
My uncle is a bachelor and owns his house outright. He lives in Scotland. I wish to give a sum of money in exchange for him leaving me his house.
We have agreed the sum just are unsure about any tax implications and legalities.
We aren't doing this to avoid inheritance tax as his hole estate is only worth around £120,000 with this house been worth around £80,000.
I'm giving him £20,000 and £250 a month for rest of his life
I'm happy to just inherit it but i'm worried if his health deteriates that he could be forced to sell the house to pay for his care. He'd prefer to keep the house in his name or even joint names but if its a must he will transfer it to me.
I never intend to sell the house or live in it but if I did sell it(when my uncles passed) what would the tax implications be?
Can he just transfer the house to me if that needs doing?
We have agreed the sum just are unsure about any tax implications and legalities.
We aren't doing this to avoid inheritance tax as his hole estate is only worth around £120,000 with this house been worth around £80,000.
I'm giving him £20,000 and £250 a month for rest of his life
I'm happy to just inherit it but i'm worried if his health deteriates that he could be forced to sell the house to pay for his care. He'd prefer to keep the house in his name or even joint names but if its a must he will transfer it to me.
I never intend to sell the house or live in it but if I did sell it(when my uncles passed) what would the tax implications be?
Can he just transfer the house to me if that needs doing?
robnokia said:
My uncle is a bachelor and owns his house outright. He lives in Scotland. I wish to give a sum of money in exchange for him leaving me his house.
We have agreed the sum just are unsure about any tax implications and legalities.
We aren't doing this to avoid inheritance tax as his hole estate is only worth around £120,000 with this house been worth around £80,000.
I'm giving him £20,000 and £250 a month for rest of his life
I'm happy to just inherit it but i'm worried if his health deteriates that he could be forced to sell the house to pay for his care. He'd prefer to keep the house in his name or even joint names but if its a must he will transfer it to me.
I never intend to sell the house or live in it but if I did sell it(when my uncles passed) what would the tax implications be?
Can he just transfer the house to me if that needs doing?
How long do you expect him to live? If he lives a further 20 years, you would end up paying £85,000 for the house. If he lives 30 years,you would pay him £115,000.We have agreed the sum just are unsure about any tax implications and legalities.
We aren't doing this to avoid inheritance tax as his hole estate is only worth around £120,000 with this house been worth around £80,000.
I'm giving him £20,000 and £250 a month for rest of his life
I'm happy to just inherit it but i'm worried if his health deteriates that he could be forced to sell the house to pay for his care. He'd prefer to keep the house in his name or even joint names but if its a must he will transfer it to me.
I never intend to sell the house or live in it but if I did sell it(when my uncles passed) what would the tax implications be?
Can he just transfer the house to me if that needs doing?
Does your uncle have mental health issues?
Has he any other relatives?
Edited by Eric Mc on Friday 16th August 10:14
Scottish law almost certainly applies but if it was English law I'd suggest you buy the property from him for £20k and grant him a lifetime tenancy at £250 a month. A competent property lawyer should be able to sort that out for you without too much difficulty. However, take a step back and have a think about who is going to be p*ssed off if he dies next year. Are there other relatives who will challenge the transfer - say he lacked mental capacity etc. If not, all is good. If so, it would be a good idea to try and get their agreement up front.
By the way, one other consideration is what happens if he wants to move if he gets older....
By the way, one other consideration is what happens if he wants to move if he gets older....
williaa68 said:
Scottish law almost certainly applies but if it was English law I'd suggest you buy the property from him for £20k and grant him a lifetime tenancy at £250 a month. A competent property lawyer should be able to sort that out for you without too much difficulty. However, take a step back and have a think about who is going to be p*ssed off if he dies next year. Are there other relatives who will challenge the transfer - say he lacked mental capacity etc. If not, all is good. If so, it would be a good idea to try and get their agreement up front.
By the way, one other consideration is what happens if he wants to move if he gets older....
No worries at all about his mental capacity. I think you think im charging him £250 a month but i'm not im giving him £250 a month in addition to the 20k.By the way, one other consideration is what happens if he wants to move if he gets older....
I understand what you are saying about relatives but I doubt it will be a problem as the deal is so good for him, hes only 62.
If I bought it for 20k and then just gave him £250 a month would he pay tax on that?
You are agreeing to buy the house from him but you have not properly agreed the true sale price because that appears to be a flexible amount based on how long he lives - which sounds pretty barking to me.
At what point in the proceedings does legal ownership pass from him to you?
Could you have paid up for 19 years of the 20 and he could then change his mind?
I would seek immediate proper legal advice before taking any of this further.
At what point in the proceedings does legal ownership pass from him to you?
Could you have paid up for 19 years of the 20 and he could then change his mind?
I would seek immediate proper legal advice before taking any of this further.
Eric Mc said:
You are agreeing to buy the house from him but you have not properly agreed the true sale price because that appears to be a flexible amount based on how long he lives - which sounds pretty barking to me.
At what point in the proceedings does legal ownership pass from him to you?
Could you have paid up for 19 years of the 20 and he could then change his mind?
I would seek immediate proper legal advice before taking any of this further.
I can see your point. I don't have the answers to your questions. The house has huge sentimental value for me and that is why this has come about.At what point in the proceedings does legal ownership pass from him to you?
Could you have paid up for 19 years of the 20 and he could then change his mind?
I would seek immediate proper legal advice before taking any of this further.
I was going to see an accountant first but will probably now see a scotish solicitor first
Tiggsy said:
no...but what about his wife...or kids.....jez, the guy could have grand children long before the old man croaks!
What's jez got to do with this? 
Sounds like a bit of a minefield OP - I'd go with buying the house outright now (assuming you can afford to). Will anybody else have a claim on his will when he dies and are you just doing this because of the sentimental value of his house to you?
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