Buying out a part owner.

[Dr Jekyll]

Two brothers have inherited their mothers house. They are the executors and sole beneficiaries of the will, which is still going through probate. They currently plan to sell the house which is worth about £400,000.
But brother A is considering buying B's share, what's the procedure in this case? Would getting a mortgage for the other £200k or most of it be easier or harder than for buying an entire property?

[Sarnie]

It depends on what you would be using the property for..........to live in or rent out?

[Doofus]

Obviously I defer to Sarnie on all matters mortgage, but if brother A pays brother B at the probate valuation and intends to renovate and flip, for example, then he assumes the entire CGT liability.

I went through something similar with my sister. It didn't end well. From a relationship POV, not a CGT one.

[The Rotrex Kid]

Sarnie said:

It depends on what you would be using the property for..........to live in or rent out?

Interested in the answer to this. Friend is currently doing the same with a plan to rent out….

[Quattromaster]

Would there be CGT to pay if they sold the house now, ie let’s presume Mum paid 50k for house, and now worth 400k.

Or does it reset when property is part of an estate.

[ConnectionError]

Is there stamp duty to consider too?

[Dr Jekyll]

Sarnie said:

It depends on what you would be using the property for..........to live in or rent out?

Live in. But neither brother is me, friends of friends.

[bmwmike]

Doofus said:

Obviously I defer to Sarnie on all matters mortgage, but if brother A pays brother B at the probate valuation and intends to renovate and flip, for example, then he assumes the entire CGT liability.

I went through something similar with my sister. It didn't end well. From a relationship POV, not a CGT one.

Can you share why it went well? Understand if not. I'm in a similar position too, and hadn't considered the CGT risk either, though i suspect our probate valuation is higher than i'd sell to a sibling for anyway.

[Doofus]

bmwmike said:

Doofus said:

Obviously I defer to Sarnie on all matters mortgage, but if brother A pays brother B at the probate valuation and intends to renovate and flip, for example, then he assumes the entire CGT liability.

I went through something similar with my sister. It didn't end well. From a relationship POV, not a CGT one.

Can you share why it went well? Understand if not. I'm in a similar position too, and hadn't considered the CGT risk either, though i suspect our probate valuation is higher than i'd sell to a sibling for anyway.

My mum was 85, and had lived there for 50 years.

I proposed renovating and selling. My sister refused because "mum's house" and "memories". I proposed buying her out. She refused because "You'll renovate mum's house and destroy all the memories".

We sold on the open market, for a significant uplift, generating CGT liabilities all round. The buyers knocked it down and built something else, which everyone (neighbours included) agrees has destroyed the 'ambience' of the village.

I'm a bd because I live 100 miles away, so I "don't care". She lives next door to it, so she's "the victim".

[Oakey]

If your sister wanted to maintain it as a mausoleum to your mother then she should have bought you out. Wtf was.she expecting to happen?

[Doofus]

Oakey said:

If your sister wanted to maintain it as a mausoleum to your mother then she should have bought you out. Wtf was.she expecting to happen?

She couldn't afford to.

[bmwmike]

Doofus said:

Oakey said:

If your sister wanted to maintain it as a mausoleum to your mother then she should have bought you out. Wtf was.she expecting to happen?

She couldn't afford to.

Thanks for the extra info Doofus. I am in quite a similar position and treading carefully as its indeed a sensitive matter - feelings, memories, etc all involved.

[supersport]

I guess it's similar to when parents decide to move away from the family home and some of the kids get upset that their child home will be someone else's.

[bmwmike]

supersport said:

I guess it's similar to when parents decide to move away from the family home and some of the kids get upset that their child home will be someone else's.

Yes, very similar. Doesn't help if said family built the house too, but still - just bricks and mortar at the end of the day. Memories go with you.

Also council tax and bills on a second property gets expensive fast

[SunsetZed]

Doofus said:

We sold on the open market, for a significant uplift, generating CGT liabilities all round.

I'm a little confused, do you mean that there was a significant uplift at the time of sale versus the value upon inheriting the property which generated the CGT liabilities?

[Doofus]

SunsetZed said:

I'm a little confused, do you mean that there was a significant uplift at the time of sale versus the value upon inheriting the property which generated the CGT liabilities?

Yes. It sold for more than the probate valuation.

[SunsetZed]

Doofus said:

SunsetZed said:

I'm a little confused, do you mean that there was a significant uplift at the time of sale versus the value upon inheriting the property which generated the CGT liabilities?

Yes. It sold for more than the probate valuation.

Thanks!