Giving house to step-daughter?

[IsMadl]

Hi all, I have one step-daughter, no biological children (could never have any). My step-daughter is 27, she got married last summer, and is expecting her first baby. Her dad and I got together when she was 10 (her mum passed away when she was 7), we married when she was 16 and have been together happily since.

Before her dad and I married I had a 3 bed semi, we live in the North but it recently got valued at £300,000. We have been renting it out since I moved in here 12 years ago. The money has funded mostly my pension and odds and ends here. I'm a primary teacher though so have a good pension as it is.

SD and her husband have been saving really hard for a house, they earn well, she in the civil service and he in finance, but they work in London and obviously it is expensive. She had about £150,000 from her mum (-uni costs, wedding costs etc.) and they are saving.
Currently the house I had is to be split between my niece and nephew when I die, the house I live in now will go to step-daughter when both dad and I pass.

To me my step-daughter is my own, I was never able to have children of my own and I think she is incredible, so smart, beautiful, funny and caring. I hate seeing her struggle to build the deposit for a nice house, in a nice area with a garden which is all she really wants. I've been thinking maybe it is time I sell the house and give her the profit, obviously it would up there deposit massively. I wouldn't do it if I didn't think she and her DH had earned it but they are lovely, kind, hardworking people.

I told my husband and he said that it would be a lovely thing to do but no pressure as it is mine. My mum and dad think it would be a horrendous idea.

AIBU to consider this?

Any chance your parents have told either your siblings or your niece/nephew about your previous plans and that's why they're so against the idea? Sounds like they never accepted the idea of having a step granddaughter so it might just be that.

Or you could directly gift her the house and as long as u live (sorry) 7more years there will be not CGT. When it becomes her asset and when she sells it she might have to pay a very small amount if the house price increases significantly and it’s over the personal CGT allowance. Probably the best tax efficient and most cash able way to give her the money

Yes, me, I am jealous. Unashamedly so. She is a very, very lucky girl to have you in her life. I wish my parents had been in the position to give me this sort of opportunity.

One word of caution - if she has the money now it really needs to be invested properly and if not in bricks and mortar then in some sort of high interest, high return scheme. Having that sort of money sitting in a bank account is a waste and you run the risk of squandering it. While the house is there and earning money it is a true asset. Is the rent from the house sufficient to cover the mortgage on any new house your step-daughter may buy. Its nice to own somewhere outright, but aren't there some tax benefits to having a mortgage? and do they outweigh the amount of interest you have to pay? All these things need looking at very carefully by a qualified IFA and any decision reached should be made after consulting a solicitor who specializes in this sort of thing.

You would need to check how much would be left after Capital Gains Tax (now) and balance that against Inheritance Tax (after you die). That is a minefield.

At the end of the day you must do what feels right for you, but don't do anything in haste that you might regret later. By doing the wrong thing now your step-daughter and family might lose out on 10s of thousands of pounds in the future, which is money that could be put towards your grandchild's education.

The first question is do you really have enough of a pension, especially if you and your partner were to separate or in the case of him dying before you? You're parents are still alive so you cannot be that old and the world is becoming a tougher and tougher place economically. If £300k is more than a third of your total assets (including pension and excluding partner's assets) then giving it away is madness and you need to stop this line of conversation. But let's say you are wealthy and £300k is less than a third of your total assets. Fine maybe you can afford to be generous.

The bit that seems most bizarre is why toy with the idea of giving this property away and talking about it out loud, to partner and parents, well before getting to the point of selling it/dying? There has clearly been previous discussions about niece and nephew and now you are touting the idea of giving it to step daughter. You either like the power of being holder and bestower of wealth or you are keen to be seen as a 'generous and nice' person, or both. There is no need to be talking to everyone about this and getting hopes up. You really can't know that your niece and nephew haven't been given the wink that this house is thiers (might explain your parents' resistance.) This has needless family drama written all over it, simply because you enjoy imagining whose life you're going improve in your god-like gifting of £300k. Now you are telling the internet about it for extra feels.

Which brings me to my third point. Why chose one? It's not a game show. Why not give each of them, niece, nephew and step-daughter £100k? SD has had a helping hand of £150k already, which as a northern teacher, you will know is A LOT of money. Another £100k would still mean inheritance of £250k- an amount most of us can only dream of. SD would not be hard done by. Come on. Are you trying to buy your way into role of grandma or obligate SD into a close relationship with you? Perhaps you want to impress/win over your partner by gifting money to his child?

So yes, I'm sorry to be a party pooper but you really need to consider your motivation here. Nobody is 100% altruistic. Even the Dalai Lama is hoping for better afterlife. What is your real reason for wanting to gift £300k to your SD at the exclusion of your niece and nephew? Be honest with yourself.

Not unreasonable. She is your daughter! How lovely to be able to do that for her. Well done you for being such a great step mum ❤️

Keep your house. Divide it amongst your sd, niece and nephew in your will. Your sd already has 150,000 from her mum. She will get the house from her dad. Perhaps her dad could sell his house, that you both live in now, and give his dd the cash she needs. You could then both (you and your dh) live in your house.

That’s a weirdly hostile take on it. Why would she include her niece and nephew at all? They have their own parents to inherit from. She intends to leave it to the person she has raised and considers to be her daughter, which is entirely normal.

If someone other than OP has offered the niece and nephew OP’s house then any fallout from that is on them.

It's not hostile it's honest. I didn't bring niece and nephew into it, the OP did by promising the house to her niece and nephew the house after her death and not staying quiet on the matter. If you are open about the fact such and such is going to inherit £300k in your will then change your mind, that's needless causing drama. It's literally the basis of a good number of Agatha Christie's books and subsequent dramas thereafter.

There will be a motivation "wanting to help" is not a motivation. The honest explanation of why she wants to help at the expense of promised legacies to her niece and nephew (not to mention annoying her parents) is where the motivation really sits. I'm not keen on the parents 'blood is thicker than water' viewpoint, but if the OP only has a £300k house due to considerable support from her parents, they might view it as a family asset. It's incredibly naive for the OP not to appreciate all this.

The stepdaughter is not struggling and out on the streets, so why now? She doesn't seem to have thought how step daughter would feel about it either. Accepting such a large gift does put huge obligation on a person to a point of it being a curse. And how would OP feel if stepdaughter and her partner split up and he rides into the night with half OP's money?

Looking at this thread perhaps most people are naive about money, and just think throwing around lots of money makes the world better with absolutely no unintended consequences. My experience with high net worth individuals suggests that not the case.