Giving house to step-daughter?

We're in your position but reversed - my biological daughter and my husband is her step-dad. He brought her up from the age of four, gave her away at her wedding. Like you, he considers her his daughter and so far we have gifted her a house deposit when she got married, and at his instigation we have just given her another £50k to finance another house move as they're short of space since having their children. (We all live in a cheaper area than your daughter). Like you, we have plenty of assets to go round - and love is infinite. It gives him great joy to see our daughter benefit and make their life a little bit more secure and easier - her and her husband both work hard in good jobs and have both achieved good progression in their careers. They'll get it all anyway if we stay out of a care home - so why not have the pleasure of seeing them benefit now?

How sad that your parents are so judgemental and blinkered - it would definitely affect my relationship with them if I was in your situation. Totally their loss too about not attending your step-daughters wedding - what pathetic message was that intended to convey? They also need to mind their own business - they lost the moral high ground anyway by their actions.

I would definitely do what you are considering in a heartbeat - presumably your niece and nephew will be financially looked after by their own parents. You are lovely, open-minded and have all the right values - your reward?- a beloved and loving daughter. Go for it OP!!!!

As someone whose parents’ house value all went in care home fees, I’d say do this now rather than wait. My parents would be horrified to realise they weren’t able to leave me anything of their hard earned money because they didn’t plan ahead.

We’ve gifted our DC money when they needed it in their 30s rather than them waiting until their 50s or eventually getting nothing.

I’d sell the house and keep 50% in a high interest account or ISA. Then I’d gift the SD 50% of the remainder and split the rest between DN and DN - I expect they could do with a leg up too? I’m sure they’d all be delighted. Live for 7 years and there’s no tax implications- another reason to do it now rather than later. And live a bit in retirement.

Ur nephew and niece are not entitled to get anything off you just bc your don't have children. Your parents are mad bc they knew their grandchildren were going to benefit and now instead it will be a non blood relative it goes to.

The niece nephew were only going to benefit in the event of your death, but selling will mean your SD benefits now and you get to see her live comfortably.

You are a lovely person op, and by the sounds of it, your step daughter is an incredible person to you also. It's heart warming to see you care for her as your own. We don't have to be bound by blood to love.

I would suggest after giving SD, keep some back for yourself for the future in case your pension isn't enough, the way things are going, the cost of living will only increase.

If you decide to go ahead with this I'd talk to a lawyer about ring fencing it in case DD gets divorced in the future. I don't know if a long marriage would erode this protection but it is possible to protect it to some extent.

It's your house, you can do what you want with it, but it might not be wise to divest yourself of a major asset during your life. Do you have an alternative source of funding for your pension?

To all the posters saying "ringfence" the money. You can't do this.

The OP said that the intention was to provide a larger deposit for a family home for her SD and husband.

In this situation the money becomes "intermingled" and becomes a matrimonial asset.

Even if they owned the property as tenants in common with different percentages, in the event of a divorce the court will look at the present and future needs of both parties and that may overrule anything else.

I'd say let your step daughter have it, it doesn't matter if she's a "step" sounds like you both have that mother / daughter bond regardless.

If I was in your shoes I'd give it to her rather than a nephew or niece.

You're parents sound like a pair of idiots. You don’t have to give birth to love a child unconditionally. 😳

I’m a step mum and my two fabulous boys are adults now with children of their own. I also have my own teenage child with my DH, their dad. As far as I’m concerned my adult step sons are just as much my sons. Their mum also died when they were young and had a life insurance payout that went to them.

My parents were both dead before I met DH but my mum was like me and she would definitely have loved all my boys equally, because that’s what love is about.

Presumably, your niece and nephew will inherit from their own parents and your parents too?

Yeah I didn't mention whether she did have her Mum beyond 7, that's not what my comment was about.

I would put your security first.

Think out in detail how you would manage if your DH died in the nearish future or further ahead: would you really manage retirement with a household to run on a single retirement income? New boiler? New roof?

Think out in detail how you would manage should you and your DH divorce (it does happen, no one is immune from the possibility and anyway ‘security’ means security should the ‘it will never happen’ not just the things you can envisage), in which case you would be worse off because you would presumably need to sell your current house and then manage all costs as a lone householder.

A chunk of the value of the house will disappear in CGT.

It is lovely that you want to help your DSD. What about giving her a year or two’s net income from your rented house, and then altering your will to leave it split equally between your niece, nephew and her?

And stop discussing things with your parents.. it isn’t their business, they obviously favour the interests of their grandchildren, and will potentially stir up trouble with your sibling over it.

Most people have a mother beyond the age of 7…..OP I think if you go forward with your plan you’ll also get a huge benefit from the knowledge that you’ve helped your daughter out when she can benefit rather than your niece and nephew (who will presumably inherit from parents?) in potentially 40 years time.

As others have said, look into ringfencing it for your daughter should the worst happen and they divorce

This is lovely to see! The only thing I would be very cautious of is that you’re not just gifting the money to your SD but her husband too, which would get messy in the event of separation. I would ring fence the money with a solicitors input, see what options there are

i would say your property your decision. It doesn't sound kind of your parents to not accept your stepdaughter in the same way that you do and your will is none of their business. Yes get some nuts and bolts advice if you feel you need it to make sure that the money goes where and how you want it to and also remember (sorry) that you have to survive for 7 years after the gift to avoid IHT if your estate would be liable.

It is your property and your decision.

She doesn't need legal advice though for this the most simplest of cash gifts. Perhaps tax advice as its a potentially exempt transfer.

How sad that your parents don't see your (step)daughter as their grand daughter.

My ILS are like this with my son but my parents have fully embraced my step son as one of their 7 grandchildren and has been treated equally. I now have a step grandson of my own and do the same.

It's not as though she is newly om the scene. I wonder whether your parents have actually told you siblings or the nephew and niece that they will be OK as they are inheriting auntie's money!!

"...as it will be subject to capital gains tax at 40% (or even 44% as it’s a residential property)."

Where on earth are you getting those figures from? The current UK figures for a basic rate tax payer are 18% on any gain that would bring their income up to the higher rate tax threshold and then 24% on anything above that.

For higher or additional tax rate payers then it's a flat 24%.

Although, it is a fair point that this is another argument against selling the home now and leaving it to the SD in the OP's will. Any property like this which is passed to a beneficiary in a will is exempt from CGT (but of course there may be IHT to pay).

You must have been so disappointed with your parents over the years and their lack of involvement with your DSD.

I just can’t understand their way of thinking.

You sound lovely OP and it’s a great thing to do, with the correct legal advice.

Why not gift your daughter the rental money?

Capital Gains Tax?

i think the thought it is lovely but you just sound really naive. I don’t know how old you are but I’m always surprised how little MNers are aware of the costs of old age. 300k is only 4 years in a care home/ of home care. What if you or DH get dementia, mobility issues, lose your sight etc? A teacher’s pension is nice but not overly generous.

If they divorce her DH will get half the value, if you divorce you will need it.

I would hold that thought, ring-fence the money for yourself while you’re alive, and leave it all to her when you pass.

OP explained she's used some if it 'university costs , wedding etc'

Why did you tell your parents?

OP, I think this is a lovely idea. Your niece and nephew will inherit from their parents and, no doubt, from your parents/their grandparents and all are unaware of what you had in your will until now.

Inheritance, whilst legally following a family line, is a gift not an entitlement. If your parents are concerned, you can offer that anything that they leave you will be ring-fenced for the niece/nephew, which observes their wishes that their inheritance remain in the bloodline, or used solely by you should you and DH ever divorce.

Otherwise, if you can manage without the income from your property, I think this would be a lovely gesture. I think when gifting you can protect the gift so that stays with you DSD upon a divorce, perhaps placing it in a trust of sorts for her children with her being a lifetime beneficiary? I speak to a solicitor to explore the best way to do this.

The only issue I have with your opening post @IsMadl is that you're discussing what you and your husband are planning on putting into your wills with your parents, who, now they know the path that you are planning on taking may decide to alter their wills and leave you out of them entirely. If they haven't taken to your SD by now, it's unlikely that they will and they may see any inheritance that would be going your way now as going her way too.
I'd recommend not telling them anything financial in the future and keep the conversations with them off the personal topics area.