To not want to promise BiL inheritance cut

[NamingShaming]

This has the potential to be a long one.

I live in London, work four days a week and live with my DH who works full time and our two kids (5,3). I’m retraining (over weekends) and want to quit my job or reduce days. My DH HATES his (on paper v good) job. We think we need a change - even before lockdown we’ve been struggling to enjoy life and I’m the quintessential sitcom mum who arrives sweaty and five mins late to pick up from after school club (pre lockdown days). (My DH does morning drop offs)

Anyway, we are thinking of leaving London to downsize our mortgage because we both want to work less and achieve more balance.

My in-laws who live in what is considered a ‘very nice’ (and this pricey) city want to downsize. I have no passion for this area but I appreciate my DH wants to be nearer his folks and then they can see grandkids who they are great with. (They can’t visit us due to health). They have offered to sell us their house in a private sale for c. £50kless than what is was valued for earlier this year. They think anecdotally it may have gone up in price which in theory would be a shaving off of £100k but then again it’s an anecdotal going up in price.

I asked BiL if he would have any objections to us purchasing house and he said no. I asked if he’d also want to live in same city to be near his folks and he said no but it would be handy having us all in one place for visits. The family gets on v well.

Hes now thought about it and wants to put in contract that when in-laws pass away he gets whatever saving (say it’s £50k) we made on house ring fenced.

AIBU to refuse? I don’t want to tear apart family over £50k but at the same time there is no fixed price of a house and you never actually know how much it would sell for. Other issue is the house is more than we want to pay really and won’t reduce mortgage by THAT much as houses in my area are not going for much at the moment.

DH has suggested we pay for a surveyor and out the in-laws suggested mates rates epics against that and then if it is a saving agree on contract that BiL gets that saving further down the line.
For full disclosure although I do want a change in my life to get more balance I would v likely give up my job int his scenario because - unless lockdown changes wfh rules at my company - I have to be based in London. So for me there is a lot of theoretical money wrapped up in this emotional move.

£50kless than what is was valued for earlier this year.

Is that an Estate Agent valuation? Is the £50K what they would not need to pay an EA if they sold it to you instead? (EA fees and London prices being what they are.) This might not so much be £50K you receive from them a notional difference that is mostly based on fees they now don't need to pay.

In a way, the bil doesn't really have much to complain about. If his parents want to downsize, even if op doesn't buy it he's going to lose that inheritance anyway. Not like he can ask the new owners to ring fence any money.

This would be easier settled by the parents who could when downsizing, give the brother money left over from their purchase of a new house. I doubt said new house will cost as much as their old one as it will be smaller. So he could get his inheritance that way. Yeah the house may increase in value, it may also decrease in value. I doubt he'd be interested then.

Don't buy it though. You have said you can't afford it, it won't reduce your mortgage which was the objective. It will cause hassle, it's not worth it.

£50K for estate agents fees! Mine were £630!

The original plan that you made is a better one any, without the family and financial complications. If your PIL are ready to downsize or move then they can do that anyway and maybe even move nearer to where you want to live.

@Palavah

If your PIL sell you the house at below market rate and gift part of the proceeds that may have implications for 1) their liability for care costs 2) IHT if they die within 7 years

I think this is very important. The local authority will take you to court without hesitation.

It doesn't sound like you actually want the house, so you shouldn't buy it.

However, if you do actually want the house and your PIL do actually want to sell it, if they sell it to you for £50k under market value then they are essentially giving you £50k cash from their own pockets (less fees etc). If they can't give the same gift to BIL I think it's fair that the first £50k is ring fenced for him in their will.

I don't think that's your deal to broker though!

@MrsHuntGeneNotJeremyObviously

I see bil's point - you would essentially be getting a 50k gift from his parents. They shouldn't be burying their heads in the sand and telling you to sort it out yourselves - it's their money/property, so they should take charge of it. I do think it's fair that if they give one son 50k, they ought to do it for both. I wouldn't touch this with a barge pole for all the reasons listed by pp. It seems like a nice easy solution on the face of it but it really isn't.

This, totally this. I know it sounds childish to think 'fair' in terms of money but it is the only way to go to avoid deep emotional hurt. Why would you think it's OK for PIL to give you 50-100K and give BIL nothing How would you feel if they gave him 50-100K and gave DH nothing? His suggestion about changing the will to reflect this gift seems sound. Issues of house depreciation are a total red herring as you would be affected whatever house you bought. He appears willing to risk not getting any inheritance at all if everything goes in care home fees whilst his brother still gets 50-100K so I think he is being reasonable and I can't understand your resistance to this.

Many years ago we were offered and bought my parents home. We saved on estate agent fees and nothing else. My db told my dsis that they would have bought the house but it was never offered to them.
My dsis massively took db's side as she too had fallen out with my parents over another issue.
It was over 30 years later before I found out my db had in fact been offered the house before me as he was the oldest but he couldn't afford it and rather than admit that he told my dsis a lie.
I would never enter into a family transaction again.
Buy your own house, owe nobody anything.

To be honest it’s not really up to you to refuse is it

I'm afraid this is your bottom line here. Its not your choice to make because its not your house, its theirs and i can understand why their son wants an equal share. If it was your parent, wouldnt you?

You are acting as if you're entitled to more say over this than he is which is wrong because its his parents. Personally I wouldnt buy the house- too messy and too much potential for arguments.

If you insist on going ahead, get it properly valued and let the actual owners decide what they wish to do. Your feelings on this are irrelevant here because its not your house.

You're planning to move to a place you don't particularly like, to live in a house you don't particularly want and give up your job? Are you nuts?

And not only that, as far as I can tell the only reason that the OP is considering doing this is because the house she doesn’t particularly will have £50k knocked off.

This is one of the daftest threads I’ve ever read!

Given that you don't like the area and don't seem keen on the house, I'd say don't buy it. I realise that on paper it seems like a good deal because of the discounted price, but if you don't like a place, it doesn't matter how cheap it is. This isn't a hideous vase bought at a jumble sale and then sold at auction for a massive gain, you're actually going to have to live there.

I think the care costs argument is a bit unlikely. If they had to go into care, they'd only have to sell the new house once their money had gone. It would take someone very on the ball at the council to think "How come they they only had £X left? What happened to the money from the previous house?" and start ferretting around to see where they used to live, look into retrospective valuations etc. And the extrat £20k of IHT is neither here nor there, as it would surely be covered by the sale of the current home.

I think BIL is a bit of a CF though. If the "discount" you'd get is only £50k, his "share" would be £25k, not £50k. And it's between him and his parents. If they want to top-slice their estate so he gets £25k before the rest is divvied up, they can do that.

I'd never agree to what he proposes. Supposing you had to sell and needed every penny from that house, you'd really resent having to give him a chunk of it. Or he needed money and started presurising you to sell.

He's also naive, he should be asking for a percentage of the value, not a fixed amount. I know someone who had a 25% interest in a house and protected £6k of equity when it was worth approx £24k. When it was finally sold, many years later, it went for over £300k. He lost out on all the increase in value!

Why would you think it's OK for PIL to give you 50-100K and give BIL nothing How would you feel if they gave him 50-100K and gave DH nothing

Exactly. My guess is- if this were the scenario the OP's reaction would be very very different.

If you're PIL want to help they'd be much better off selling theirs at the full market rate and splitting the resulting profit (after buying their next property) between you and BIL. Then you can put the money towards something you do want and you don't have BIL nursing a grievance. Plus you can do what you like with the new place without having to worry about upsetting either PILs or BIL.

If you and PIL are both downsizing can you all move to an area that is cheaper but in separate houses? What is keeping the PILs in their current location? If their health is too bad to visit you presumably they don't have much of a social life where they are now. Different if they have a circle of friends they see regularly.

If your PIL

This has got disaster written all over it.

Will your PIL mind when you repaint ‘their’ house or rip out ‘their’ kitchen and replace it.

I think regardless of money this is fraught with stress.

You need three valuations and then you need legal advice if you are paying less. Both HMRC (IHT and SD) and the council (care home fees) may one day be very interested in how much you saved.

The will is up to your in laws.

Doesn't sound like a good idea to me

I thought you wanted to move to have a lower mortgage, all that hassle and it doesn't sound like it will make much difference

Do you even like the house and city?

I would buy your own house, less hassle

A house you don't really want at a possible but not definite saving that will probably mean you owe BiL £50 grand AND will be seen as the general extended family home not solely yours in perpetuity. I wouldn't.

It is too complicated. My ex husband tried to do the same with me because he didn't want me to get more that 50/50. My solicitor wouldn't hear of it. You may not be in a position to give them £50,000 when you in-laws die and he could force you to sell. I think to save everyone falling out buy somewhere else, who knows once the tax saving ends early next year properties might go down anyway.

Sorry but the fair thing to do is to compensate the bil for your gain, whether you want to or not bares no difference.

When you purchase a house you are purchasing at todays price for gain or for loss in future years. If today the house is worth 100 and you pay 90, then you have paid 10 less than the market value.

If there are two siblings then 5 is the loss for the other one. So that should be given to them, I would even say at the time of purchase.

Don't fall out over being tight if you all have a good relationship, its a bad move.

So you want to get a discount on the in laws house, and shaft your husbands brother out of getting something of a similar value to keep it fair and so that one child isn't being favoured?

Either buy it at market value, or don't.

Also, the price the house ends up being years down the line is largely irrelevant, as the discount was given at the time of purchase, it's not your brother in laws fault if the house falls in value after you've bought it.

it wouldn't be £50k it would be half

If you save £50k now then both brothers inherit then that saving needs to be split equally so £25k each

Get proper valuations and then get your husband to suggest to his parents that they ring fence that amount (index linked?) for his brother.

That way both brother get the same.

That obviously the fairest way. You DH is getting a bit of the inheritance early.

What possible reason is there for not doing it this way.

otherwise you may swell pay the full asking price now and then PIL give you £25k each now from the sale

Don't buy your PIL's house.

Things like this within families always cause decades of rancour, either open or hidden.

It isn't even the ideal house for you if you want to downsize.

Step away, look for the house you actually want and buy it without any involvement from extended family.

Don’t do it!