To feel uncomfortable about family buying us out

[ShabbyChic999]

Would love to know what people think of this situation. My mother in law passed away recently - her house and other assets will pass jointly to my husband and his brother. My brother in law is saying he would like to buy out full ownership of the house. In theory this would be fine. However my brother in law is pretty strapped for cash so will be looking for the best deal - thinking about it, it could put us in a difficult situation - he already is saying it's worth about 100k less than a similar house on the same street sold for. We would obviously need to get the house independently valued. I feel this could be very tricky to get through without one brother feeling hard done by!!! Has anyone been through similar?

I think we will have this issue at some point in time. MiL 82 and not in good health. BiL still lives at home but not in a caring role. My MiL waits on him hand and foot cooks all his meals and does his laundry, she also irons for him, cleans the whole house and foes shipping online etc. BiL does nothing. MiL gave DH a copy of her will. Both sons are joint executors. We have our own house. I know BiL will want to stay in the house. It's been his home since he was born. He will probably want to buy DH share from him but will want a huge discount. I don't know how much he has in savings but he does have some ISA's. Problem is he is now 61 as DH older brother so would not have many years to get a mortgage for. MiL might live until BiL retires at 67. Don't know what would happen then. Brothers are not close.

That's a good idea.

I bought my Mums house (not probate) 3 valuations, did the average and Mum knocked £5k off.
My and dhs will specify that any property is to be sold and divided so there will be no issue.

erm no he doesnt get to make up a valuation of his

independant only take the average-if he doesnt like that then sell

Who are the executors of the estate? For tax purposes you are supposed to get the best/ most accurate value for the property... Or you fall foul of HMRC and inheritance tax valuations.

You need an independent, accurate valuation of the house in order to have an accurate valuation of the whole estate for HMRC. This needs to be done alongside probate.

You cannot sell your brother the house for substantially below market value without potentially breaking tax regualtions. Whilst a small discount to avoid agents fees is fine, a massive amount of is not ok legally.

Be blunt, get a solicitor to spell this out if needs be. If your brother cannot afford to buy out your share as accurately valued for the estate, he cannot buy the house.

HMRC also have views on deliebrate undervaluing of estates...

What tax is it that people think the OP's partner or his brother should be paying?

The house would need to have a fair valuation for probate and along with the total size of the estate determine if any inheritance tax was due.

If the OPs partner inherits the house and sells it for £1 or one million or gives it away for free capital gains tax would only be due on any increase in value between the probate value and the value at sale/gift so if the sale were done fairly quickly there would be no capital gains tax to pay.

Stamp duty would be due by the BIL on the "consideration" paid - my understanding of this is what was paid for the house. Second home stamp duty would be due if BIL already owns a main home that he does not sell and the consideration is over 40k. (I think)

Are people referring to some other tax?

This is the correct advise.