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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Buying MILs holiday home.

217 replies

strengthinnumber · 04/11/2021 18:17

My MIL has owned a holiday home for over 30 years. She was an accidental landlord under strange circumstances and apparently nearly sold it a couple of times in the early years, but ended up keeping it and renting it out either as a family home or latterly as a holiday let.

Because of where it is it's now worth a lot of money (3 beds, parking, garden,10 mins walking distance to lovely seaside town and beach.) We've always holidayed there with her at least once a year as have my DH's siblings.

Some background. DH doesn't really like the place due to bad memories. His siblings either pretend the bad memories aren't a thing (SIL) or actively revel in being in the place and happy as a kind of giant fuck you to the person who MIL inherited from (BIL). Anyway there was a bit of drama with the house over the summer which apparently made MIL think, and she's decided to sell the house. But she wants DH and his siblings to buy it.

She's offering it to us for less than the market price (but an amount that won't be queried for IHT purposes. SIL works in this field and it's legal and watertight). This is still a comfortable 6 figure sum from each of us though.

I think it's a no brainer. Rental income is stellar and we would be getting a great asset at a fantastic price. The kids love it and we've had fabulous holidays there.

BIL and SIL are on board as well. However DH is flatly refusing. His reasons: he still feels uncomfortable in the house. He'd have to be in business with his brother and sister who (in fairness) are a bit much. He worries his mum will miss the income. We'd have to use most of our savings to buy it.

Basically I think he's digging his heels in because he doesn't want to own it because he doesn't like it. And I get it. But hey- if necessary we never have to go there again. It's still daft to turn down the opportunity to purchase it. It would provide a better pension for us in later life and help fund the kids through university. I'm very frustrated as he's letting his feelings about the place make him miss out on a very sensible financial opportunity.

Now MIL has approached me directly and asked if I'd like to buy DHs share (she wants her grandchildren to benefit). I have some personal investments I could sell plus technically half the savings are mine (we've contributed equally over the years).

Would IBTA if I did this. Mil seems to think DH won't mind and that in fact he'd be happy eventually to gave the decision taken out of his hands.

OP posts:
GlowingGardens · 04/11/2021 18:55

@Offmyfence

Your MIL is wanting it to stay in the family..so she can control it!

Otherwise sell it at market rate, then distribute the proceeds for you to invest how you want.

It's not a strings free gift!

this! Much better all round.
Offmyfence · 04/11/2021 18:55

@tara66

Ask DH if he can come up with some other brilliant investment. If it is your money you have been allowed to do what you want with it since 1870.
There is honestly more to life than money!

They've got decent investments by the sound of it, that are hassle free

Ok, she may make more, but with a lot of potential hassle!

rookiemere · 04/11/2021 18:56

Why are you even entertaining this idea?

A sound investment is one where you can take out the cash easily. That is not the case here. If you genuinely have a six figure sum ( £100K + ?) sitting looking for something to do, then you don't need the rental income, or if you do buy a different property.

Think about why MIL is offering it at less than market price - it's because she wants it to stay in the family and not be sold.

Even without your DHs bad memories of the place, I wouldn't touch this deal with a bargepole.

gogohm · 04/11/2021 18:56

I sounds like a good business opportunity but as there is tension you need to ensure that you get a proper business contract drawn up with the siblings eg when they use it do they pay? If each of you get 2 weeks each per year, if you don't use it do you get all the income from your allocation? Money should be put aside for repairs from the income but how will signing for repairs work? What if one of the siblings does work on the property?

If it were me and my siblings there would not be an issue as we all get on and my DD's are the sole beneficiaries of both their estates, lucky kids!

Badbadbunny · 04/11/2021 18:57

@TeenMinusTests

So you could accept it and then immediately force a sale? And no one would mind?

If you sell you'd have to pay Capital Gains tax on it though as a second home and you'd make a gain of 100k+

You'd have to pay tax on the rent anyway.
You need to allow for empty times.

No the OP wouldn't have CGT on the "profit". The MIL's CGT would be based on market value, not actual value, so the MIL would pay CGT as if they'd sold it for full asking price, i.e. paying CGT on money she hadn't received. OP acquires it at market value for CGT purposes so if they sold it at market value, they'd have no CGT and get to keep the full "profit". I do hope MIL has taken proper advice re CGT!
Offmyfence · 04/11/2021 18:57

@strengthinnumber so it's gone from he hated the person to he disliked them.... interesting that you're minimising now!

Hoppinggreen · 04/11/2021 18:57

@Pallisers

I had a friend whose dh's father and uncles inherited a family holiday home in a lovely area. They kept it. We stayed there for a weekend once and it was insane. To avoid the constant conflicts over the years they had a complicated system of booking weekends/weeks that had an algorithim that could launch a person into space. and when we left we had to do things like turn all the forks on their sides to the left in the drawer. again over the years they had to draw up this incredible list of detailed rules to avoid conflict. And they didn't rent the place out.
My sdad owned 2/9 of a property in Scotland. It was a former family home and in a lovely spot but it needed the skills of Barnier, Boutros Boutros Ghali and Kofi Annan combined to sort out anything as simple as replacing a chair, let alone any of the family being able to stay there!
JustLyra · 04/11/2021 18:57

Frankly BIL (gay) is the one who probably has the biggest axe to grind and he's delighted the homophobic deadbeat finally gave them something useful.

Which is nice for him.

It might be nice for your DH for people to respect his wishes to do with the place.

ChargingBuck · 04/11/2021 18:58

@strengthinnumber

So.... we'd be getting the house at a discount. Discount is worth over £100k each before we take into account rental income.

Would people really walk away from that much money? Even if we sell the house a few years later if the management gets too much we'd make money.

Someone mentioned i was controlling and not accounting fir DHs feelings. Outside of keyboard warriors would you genuinely not try to influence your partner for that amount of money especially as us running it as a rental business means he'd have the excuse to never go there again?

Agreement in writing would be that if one person wants to sell then sale happens.

If it sounds too good to be true - it's too good to be true.

Why would your MiL be giving away £300k?
Is she so wants to give each sibling £100k, she could sell up & give them cash.

Yusanaim · 04/11/2021 18:59

What if one sibling decides to stay all summer so no income, what if one sibling has homeless very dear friend and wants to let them stay there, what if etc etc etc
Probably no from me

Figmentofmyimagination · 04/11/2021 18:59

What a terrible idea. Just buy something else you both like, without his family involved.

JustLyra · 04/11/2021 19:01

It also needs to be remembered that there is no time limit on Deprivation of Capital. So, if your MIL ever needs care that 300k is going to be a glaring hole in her finances

IAAP · 04/11/2021 19:02

Hang on if you have the agreement one of you wants to sell and you are sell - what to say that they want to sell it for £50 or demands £50 million to and you have to sell or can’t sell- they are 2/3 and they sell
For £50 or whatever or they hang on for more. What happens if one of them gets, divorce, bankrupt or dies?

You need every scenario thought through and then some others - who pays repairs, who pays costs? Etc what happens if one of you wants to live in it?

WallaceinAnderland · 04/11/2021 19:02

@strengthinnumber

It would be treated as a business. Just a business. He'd never have to go there again if he didn't want to. I wouldn't do it behind his back. I'd be upfront that I was buying it and how.
Never go into business with family.

Your DH does not want this. Respect his wishes. Walk away.

Original poster
strengthinnumber · 04/11/2021 19:03

@Yusanaim

What if one sibling decides to stay all summer so no income, what if one sibling has homeless very dear friend and wants to let them stay there, what if etc etc etc Probably no from me
Would be run as a business by agents. Usual one week per year offered to siblings.
OP posts:
ChicCroissant · 04/11/2021 19:04

No. It's a bad idea. But your DH's feelings about it don't seem to matter to you, and they didn't the last time you raised this on here as well.

And yes, no matter what the money involved is my DH's feelings would matter more to me so I wouldn't do it. I wouldn't go against his wishes on this.

Offmyfence · 04/11/2021 19:05

@Badbadbunny if the OP bought it for £100k under market value, then forced a sale, she'd have a CGT liability of £33,333 thousand. She'd have a CGT allowance of £12,300 Any gain above that is taxed at either 18% or 28% dependent on OPs income.

Two very separate issues, with DM and OP.

oldandscunnered · 04/11/2021 19:05

Just make sure going forward you can use it for short time holiday lets. There is apparently new legislation going through for this, especially to keep the integrity of beauty hotspots. Looks like people are going to have to jump through hoops to do mainly holiday lets than longer lets. I would check that out before agreeing to anything.

Inertia · 04/11/2021 19:05

Can open, worms everywhere.

If I were your DH I would feel utterly betrayed (to the point where I’m wondering whether this is a reverse).

If you have money to invest, invest in something else.

TeenMinusTests · 04/11/2021 19:06

@Badbadbunny Oh that's interesting.

I had assumed they were all pretending the market value was what MIL is selling it for (because of the amount that won't be queried for IHT purposes in the OP), and that therefore all the profit would be by the siblings.

What you are saying is it would be effectively declared as a discounted sale upfront so MIL pays the CGT up to current market value?

I'd still stay clear.

Offmyfence · 04/11/2021 19:07

@oldandscunnered

Just make sure going forward you can use it for short time holiday lets. There is apparently new legislation going through for this, especially to keep the integrity of beauty hotspots. Looks like people are going to have to jump through hoops to do mainly holiday lets than longer lets. I would check that out before agreeing to anything.
Really? I have a holiday let! Do you have a link?
TonTonMacoute · 04/11/2021 19:08

The investment opportunity aspect is extremely tempting, but the family involvement and complications would be the clincher for me.

Unless you can persuade your DH to agree willingly, then I would stay well away.

NumberTheory · 04/11/2021 19:09

YABVU to ignore your DH’s unhappiness. I would divorce my DH if he did something like this to me. The ins and outs of the finances, how good a deal it is and whose money is being used are irrelevant. This is tied up with his family and his childhood and he doesn’t want it. To go ahead would be a giant FU to someone you’re supposed to love.

Offmyfence · 04/11/2021 19:09

[quote Offmyfence]@Badbadbunny if the OP bought it for £100k under market value, then forced a sale, she'd have a CGT liability of £33,333 thousand. She'd have a CGT allowance of £12,300 Any gain above that is taxed at either 18% or 28% dependent on OPs income.

Two very separate issues, with DM and OP. [/quote]
That's assuming the gain is split three ways.