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jointly inherited home - buy out of only one heir?

(6 Posts)
pepper30 Sat 05-Mar-16 20:33:47

I'm looking for some advice if at all possible, thought I might post in case anyone has been in similar situation or knows anything at all about law.

A relative left a home to her three siblings one of which was my mum who has passed away so myself and siblings inherit in her place. The inheritance was split equally and the will states for the house to be sold. My uncle is currently living in the house and intends to stay. My other aunt is insisting on having her share now and wants him to buy her out, but for us to keep our share in the house. I was wondering if anyone knows what the consequences of being left in the house (I.e would we be responsible for bills, fees when the house is eventually sold etc?). I don't want to see my uncle having to leave the house but also feel a bit put out also that this has been suggested as a solution without discussion.

Any help would be really gratefully received - I don't know these relatives to be honest or their motives other than they want the money quick and therefore what the implications of this would be for us if we weren't also bought out.

Sootica Sun 06-Mar-16 05:21:46

You could enter into a deed of trust with your uncle so that he has a life interest, and you and your siblings inherit your share when he dies and that he is responsible for all costs etc during his lifetime. Assuming your aunt has a third, your uncle has a third and you + siblings share a third then uncle will have two thirds after buying out aunt. On his death your uncle's two thirds share passes to whoever inherits under his will. On your uncle's death all costs of sale estate agents etc will be paid before the equity can be divided up.

However if you want or need the money now why should your aunt get bought out now and not you?

Sootica Sun 06-Mar-16 05:23:48

Oh and all your siblings will need to agree to this course of action as any of you are entitled to say you want your share now unless your uncle already has been left a life interest to stay in the property until death

Collaborate Sun 06-Mar-16 08:17:08

I'd be very careful about agreeing to a life interest if I were you. There are tax implications - a tax on putting the house in to trust and a further tax every 10 years.

If you are bought out now, no tax is payable. Why can't the uncle buy out your share too?

Assuming he can raise enough to buy out your Aunt, would his ⅓ share and what he can raise be enough to buy him somewhere suitable?

You would pay CGT on the eventual sale of your share even if not put in to trust.

Could he pay you rent for your ⅓ share?

pepper30 Sun 06-Mar-16 09:59:11

thanks all, yes the deed of variation sounds like a possibility and also if we can arrange for house of sale to come from uncle's estate as opposed to us being responsible for that.

we could certainly do with the money now but it is made more complicated as my uncle has alzheimers and would be a big thing for him now to have to move.

although its complicated further as my sister is on ESA so her part of the third may not be able to be held up in a house (e.g. if HMRC count this as having capital) as her benefits will be cancelled yet she will have no 'income' as such as it is tied up in the house.

I think I will ask the solicitor myself if uncle can buy us out, if uncle does not have enough money for this, then this has the biggest impact on my sister perhaps her part of the third could also be released?

greenfolder Tue 08-Mar-16 06:31:38

I think a lot depends on how long he has lived there and why your aunt didn't specify in the will that he could continue to live there. Who is the executor of the estate? If the will clearly states that it is to be sold then that is what should happen.

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