Settle my inheritance row!

[LetMeExplain]

Long story short, my parents signed their house over to me 10+ years ago, under the caveat that they could live there until the end of their days. This house is my inheritance, as stated in their will.
My mum passed away and my dad can’t afford to stay in the house or manage its upkeep any more. He has a disastrous relationship with money and is basically destitute.
I agreed to sell the house and buy a flat for him, to live in rent free, all he has to pay is his cost. He now demands money from me as I am making a profit from the sale of the house. I don’t want to give him any, it’s my inheritance! AIBU?

How much will you capital gains tax be?
The additional stamp duty in buying a new property as it will be a 2nd home ? (assuming you already own the one that you live in)

Assume you had this done by a solicitor and have met all landlord requirements and it is in a trust of some kind?

Sadly tax avoidance very rarely pays.

You can't inherit it if it's already yours.

Well, you've mentioned a back story so I'm assuming that the house was gifted to you as part of that back story. You've not mentioned your father's age which might be relevant here. Nor do we understand what his position is regarding his creditors should he suddenly have spare cash.

If your father has always been feckless with money, it is likely both your parents would have lost the house to their creditors long before now. As it is, in gifting it to you, they have guaranteed a roof over their heads all this time. Your father will continue to have a roof over his head which is more affordable for him to run, just not with loads of spare cash. Other options, if viable, are renting out your (their old) house and using that income to rent a smaller place for him. Or you sell the house, keep the 50% that was your mum's and hand over the other 50 to him, telling him not to come to you once he's burned through that or his creditors have seized it leaving him with nowhere to live. You may need to be very blunt with him and tell him that left to his own devices he would be in debt and homeless so he needs to count his blessings and stop being so foolish.

It's an unusual situation but I think YANBU to manage things as you've outlined in order to ensure a safe future for him.

Giving it back doesnt avoid the capital gains tax liability - how you taken advice as to how much it will be?

Maybe give him "his" half back and let him sort out his own housing and debts. You keep the half your mum would have left you.

@WestminsterAbbey the house isn't in the UK and OP has said all taxes have been paid in line with local laws.

My understanding isn’t limited. I also own my parents home. However I didn’t pay anything for it and therefore if my mum needed the money by selling it I would sell immediately and give her the. I see it as mine in name only but it’s her home that she grafted bloody hard to afford. Therefore until she actually dies it’s hers in my mind and I’m not going to sell it and take the money from her asset.

'I don't want to give him any'

Listen to yourself. Shame on you.
Treating your own father like this.

Sorry @LetMeExplain you have invoked the wrath of MN by mentioning inheritance without saying the magic spell: 'Iwouldratherhavemydarlingrelativealivethanreceiveanymoney'

The fact your DF is still alive is neither here nor there.

It is the rule.

If you hand the house back to him how long will it be before he has the house sold to pay his debts and he is banging on your door demanding to be housed by you? If you do let him stay he will be sleeping in your spare bedroom forever.

Putting him a manageable flat, which you may well have to maintain, will keep a roof over his head no matter what financial disasters he pulls down around his ears

It sounds like the transfer of the property to you, OP, may well have been to protect you and your father in exactly this situation. Your mother obviously wanted it to go to you, not for your father to lose it all in profligate spending. So I guess, to some extent, the question is - is his spending profligate?

Does he have enough income to maintain a reasonable lifestyle, or is the wealth your parents gave you, 10 years ago, something they really ought to have kept to ensure they had a comfortable old age?

If he doesn’t have enough, I think you should be looking at how to make the house work to fund a reasonable old age for him, even if it means you lose some or all of the value of the property. Because if they didn’t ahve enough for their old age, you shouldn’t have accepted it in the first place.

But if the wealth of the sold house should stay with you (and I lean that way on the little you’ve said so far), it would be in keeping with the original gift to you if you invested any money left from the sale of the house (after buying a flat for him to live in) in some sort of income producing asset and gave that income to him to top up whatever other funds he had. When he dies, you have free reign on the capital - which is how the original gift of the house would have worked.

Your plan sounds perfectly reasonable to me, OP. Well done on weathering the Mumsnet batshittery!

Yes, but if OP is in the UK, there is a Capital Gains Tax liability. We don't know whether she is.

"Long story short, my parents signed their house over to me 10+ years ago, under the caveat that they could live there until the end of their days. "

Your first sentence says it all. Your parents have priority over you. Plus, you need to look into depreciation of assets.

I would be tempted to sell the house and give your Dad 50% of the proceeds, which he can use to buy a smaller flat and live on what's left.

The Op hasn't said where they live?
CGT may still apply

@Ginmonkeyagain thing is he signed assets away 10 yrs ago. Like I say if they are owed a significant amount of money they are entitled to ask the Executor to look at gifts going back some years, but 10 yrs ago is probably safe but not guaranteed. I mean the other thing we don't know here is was the house ever her fathers - was it in his wife's name and predated marriage or a trust inheritance from her parents - there are lots of reasons it might have been done how it was. A reason to get good advice when dealing with anything slightly complex in a will.

You have a disgraceful attitude. They signed the house over to you - probably to avoid inheritance tax. WITH the proviso that they could live there until they die - ie that asset is theirs until the die. If you are exchanging that asset from house to flat & cash - that us still your dads asset until he dies. Does he actually want to move or are you bullying him in to it to get your mitts on some cash. Very sad story - your poor dad.

Give him 50% , if it sells for 500 and his workmen’s cost 250 you are even if it costs less give him the rest . Clearly at least your mum wanted you to have the house

I think that your mum did this to protect your dad from himself as much as to ensure some of her own assets passed to you.

In a way it sounds a bit like if he were an alcoholic. I think you would be perfectly fair to buy him a small flat to live in, and set aside some of the money made to give him a small income/emergency fund - in effect he will piss through that too and be coming to you for more, so there's no point sacrificing everything your mother worked/lived to give you on the altar of his irresponsibility.

How much money does he want? Does he want a lump sum or regular cash?

Unless it's worth more than a million, OP wouldn't have had to pay any inheritance tax. This is about care costs.

You are the owner of the house, so its repair and upkeep is your responsibility (and your ultimate disadvantage if you let it fall into disrepair). That's the downside of property ownership.

If your father has legal lifetime residence then he's like a sitting tenant, you can't sell it from under his feet. You'll just have to cough up for the repairs and maintenance on your property.

the problem OP is that you have a ‘my inheritance’ attitude.
not everyone in life gets an inheritance - you should consider it a privilege not an entitlement.
You have added (after your original post) details that intimate that the money was your mothers by saying ‘he tried to get his hands on her money’. But given they were together for such a long amount of time I find it difficult to see why the money she wished you to have by signing the house over to you was hers to divest and not ‘theirs’.

I think you think you have a greater entitlement to the money because you would use it better whereas he would piss it up the wall. I have the view that his entitlement is much greater (unless other details prove otherwise). In which case yiu should definitely give him the money and accept a reduced inheritance - at least you get a flat out of it.

Inheritance can be such an ugly situation. Especially when as the only child and your parents told you their plans, even signed the house over to you, you would have banked on that money and made plans I'm sure - and then one dies and things change and it becomes more of a burden.

I agree it is his money at the moment, not yours, and maybe it's not such a bad idea of selling the house while he's still relatively capable and getting him a flat that will be much better to manage for him and then give him a share of the equity to live on. You'll still benefit from the sale of the flat when he passes away.

I walked away from my Dad and any potential inheritance a year after my mum died because he is just so horribly abusive and toxic. I wouldn't want him to be able to hold money over me. Not that I don't need it! But I don't need him more.

You grabby wee bastard