Potentially life changing inheritance - wwyd?

[NotThatWise]

First time poster, apologies if I missed info or added too much detail.

I have recently inherited my childhood home, owned for 40 years, we are the only people to have ever owned it. House is mortgage free.

I’ll try and layout the facts, and I’m interested to know what other people would do in this situation. What would your future look like?

Childhood home value £350k
My home value £325k, £100k left on mortgage
Both houses are the same size in the same town.
DH (47) and I (43) plus 2 children (8 &12).

It’s upsetting selling the home you grew up in. I was born in my parents bedroom and I found it very hard at the time. What really helped was the people buying it absolutely fell in love with it ( they knew my parents as well but that’s an aside ).
If you put it up for sale it might help if you find buyers you like ( if it’s possible to be picky that is )

I'm sorry for your loss.

Is it possible to extend your home, is there room for that?

Thank you. I think the time frame bothers me. I almost believe that I put the house on the market tomorrow and the next day I can no longer go there - especially with my inheritance house. I have lots of memories that I need time to process. Knowing that it takes time is a comfort.

Thank you.
No, both houses have a small garden and we’ve been told by the estate agent that any investment won’t make its money back.

I would absolutely love to meet buyers who loved the house and were similar to my parents - newly married with a young baby, but i worry it’ll probably be some snowflakes (sorry!) as it’s walking distance to a train station direct into London….and I’ll totally despise them 🫣 x

Sadly not. Our garden is already small and all we can see from our garden is other peoples houses :(

In that case I would look at selling both and buying something that suits you better.

When my mum died we had conversations about her house and what to do with it. Eventually decided to sell as I didn’t want to be a landlord and would find it too painful to go in for any repairs etc.

We used the money to pay off our mortgage and then invested in pensions etc.

Don't be rushed into anything though as grief definitely can affect your reasoning and logic…

If your childhood home is in good, liveable condition with maybe just some aesthetic renovations needed, I’d sell the house with the £100k mortage on it and live in the childhood home, and have a cracking family holiday. Put the rest aside for a rainy day or invest it further into a smaller property.
But that would also depend on proximity to children’s schools/yours and DH’s work etc.

Totally agree with you. My mum would definitely have approved of her buyer as he loved the house and had the same interests as her. He was so lovely to me through the process and even took me out for lunch after we had completed ❤️

Would they pay capital gains tax on it? Just not inheritance tax?

I would sell both and buy a family home.
Your memories are all in your head, not in bricks and mortar. I understand as I live in a home I bought with my late DH, I have a new DH and toddler and it's not big enough for us, and not practical to extend as it would take too long with too much upheaval, so we need to sell. It'll be sad to leave as I saw it as my forever home, but my memories will never leave me.

@PyongyangKipperbang your post is sexist.

If he was the bread earner and she was a SAHP taking odd jobs here and there, that'd be OK, right.

There will be no equality until we think and act equal. He was a SAHP to facilitate her career, just like my DH was. There is nothing wrong with that.

Ref the question at hand @NotThatWise I would put both houses on tge market and proceed from there. If both sold you could all have a much nicer life elsewhere, however, you and DH will then be downsizing again once the DCs leave in c10years or so. Pls bear that in mind. By that I mean buy a good house in a great location so you know you can sell it on and its likely to accrue in value. Dont buy the biggest house in the crappiest area cos you dont know if it will improve and you may not be able to sell when you need to downsize. Personally I'd be looking at a lovely house in mid Wales with land with your budget. There are many outstanding schools in Wales too.

I'm very sorry for your loss. X

How old are your younger children? I would not move to a bigger house for them if they will be moving out in the next five years or so. Personally I would be looking at investing more for retirement, as well as having a nice holiday or two now.

Money invested now may enable them to retire a couple of years early. When you're 60 and looking at working another 7 years, each year you can go early is indeed life changing.

I had to sell my family home when Mum died when in my late 50s. It’s just something many people have to do, and you will still have the memories. Sounds like a bigger house would be ideal for you all. It could be mortgage free, with some money left over as well, so would definitely be my choice in your position.

It sounds as if the big positive that could come from this is you getting the family time together in a new home where that could be achieved. To me that sounds like a reason to sell both and find somewhere that will give you that.
Counselling sounds a very sensible idea. Good luck.

• why are you looking at moving location altogether? It sounds like selling both and buying a bigger house close to where you currently live might be best
• not sure why you mention CGT, assuming you inherited your DP's house and it is worth in the region you mention, it is v likely no CGT is payable.

All the best OP

We were left our family home, which was in a beautiful, tourist area of the country. I wanted to sell it there and then but my sisters were very attached to it emotionally. We were all in different situations, although all financially stable. My reasons for selling were due to already having a business property and home so was not keen on maintaining another property.
We kept hold of it for 17yrs, during which time we had to invest money for some major repairs and updating. We used it as a second home and let it out to a select few friends and family, with no financial gain. We were in the process of turning it over to a holiday letting agency but Covid hit and it just reinforced how much it was costing us. We were unable to visit it for nearly 6 mnths so we made the decision to sell.

What I will say is that it was no less difficult to part with on an emotional level 17yrs on than it would have been in the months after DF’s death. We had built up years of more family memories, no regrets, but it was hard work both physically and emotionally letting it go.

Looking back the equity release would have enabled DH and I to upsize at a time when we would have had the energy and drive to do so.
Although not upsizing now means we don’t have to downsize. We love where we live and having just one child means the house is not overcrowded. Having MH recently sold my business and retired we have spent a lot on updating the house and improving energy use so lowering future costs.

Like you I am the career half of the couple, DH retired early at 58 to take on the house work and teenage school support. Unfortunately he had a stroke 3 yrs ago so I am so glad he had a few years of retirement when still healthy.

I would sell the inherited house now, you will never fully disconnect from your family home. The same is true of your own family home when you have raised your family there. But it can become expensive leaving a house empty for a long period of time. Also being a landlord is risky. I rented a house out for a few years and it as lucky with tenants. My sister wasn’t so lucky and after six months the tenants had wrecked the house.

Don’t rush into buying a new home, take your time to find somewhere that you will all love. Having the money in the bank puts you in a much stronger position as a buyer and you can potentially buy a new home even if your current home hasn’t sold.

how do you propose dodging it exactly

It’s inheritance below the threshold !

You only pay capital gains tax if it sells over the probate valuation

Thank you!

I'd pick the one I liked best to live in. Do any upgrades and rent the second house to gain income from it. The rental payment would most likely cover the mortgage payment on rented house and pay a good chunk to you too meaning you'd have more money for now. You have 2 DC who could eventually inherit a house each. Sorry you lost your parent OP. I know that's a hard price to pay but enjoy your inheritance.

Ok you dont have much experience with selling. If you are willing to post pictures people will comment on how to make your properties look better and get a better price. As a start you are going to need to keep both gardens looking tidy and clean windows at both places.

Selling a property is very stressful but the sooner you start the better, council tax holidays dont last long.

Second capital gains tax - you get an allowance of 9 months for your current property if you move out. If the sale takes more than 9 months any gain is split based on how long you've lived there, so may be under the £3k allowance anyway. Is the house you live in jointly owned, if so 2 lots of allowance so £6k ? Your father's home will attract CGT on any increase in value between probate and sale. In your name only so just one £3k allowance before tax. No increase, no tax. If you move into it it attracts relief as your main residence.

I would buy a new house once one of the properties has been sold but one where your children can stay at their schools and you keep your job. Relocating a long distance away often leads to regrets. As your husband is not fully pulling his weight you may at some stage decide to leave him so keep some of the inheritance in just your name, use the interest for the extra costs of a larger house if needed. I cant see him leaving you as he has a lovely life as it it.

When you get the new house you dont have to own equal amounts, you could protect your inheritance with different shares. You'll need a solicitor for the sales and purchase, talk to them about it.

Given your updates, I would suggest putting your childhood home on the market. Don't bother with spending any money on it updating it, just get it sold.

Go round and take a walkthrough video of it before you empty and sell it. Give yourself the ability to remember it.

My DPs had to move out of my childhood home recently and I did this. The house is now boarded up ready for demolition, which is heartbreaking, but the video I have of the house takes me back to the memories.

Once that house is sold, you have no reason to rush into a decision about your current home.

I totally understand your DH's wish to move to somewhere quieter, simpler, where you can all eat dinner together.

With the benefit of a chunk of money in the bank, how about spending some time exploring different areas? Perhaps rent an AirBnB for the summer holidays where you can trial working remotely and also see what it's like to live in an area?

Based on what you've said about your current home, it's clear that you'd massively benefit from a bigger house, which you've now got the opportunity to provide. Your Dad would love you to have a bigger family home that you can spend quality time together, I'm sure. He'd much rather you have that, then hold onto his house and cost you a fortune.

All the best of luck OP.