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?

I think this is an excellent idea.

I would not give your step daughter all the profit. If you really want to give her financial help then sell the house, give her £80,000 and then invest the rest for your later life or buy a buy to let or holiday home that the whole family can enjoy.

An £80,000 deposit help to you DSD is a wonderful gift and will allow them to get a wonderful home. Please don’t give away the entire amount or even half of it as no one knows what is around the corner. The proceeds of your house will provide you and your husband with security and options in later life.

Could you split your will three ways, between your DSD, niece and nephew.

Oh dear I'm feeling a little confused now.
Some on this thread seem to think what they already have is plenty for a nice house, others are saying they will get a flat or 3 bed even with our help - which is it?

OP, how about if you suggest to your parents that they will your share of the inheritance they leave directly to their own grandchildren. So half to your sibling and half between the grandchildren. In that way your nephew and niece will get some money sooner than from you. You can feel no guilt and your parents may be satisfied?

Your niece and nephew have their own parents and grandparents to leave them a decent sized legacy if they want to. You can leave them a small legacy in your will which I am sure they would appreciate in due course.

If your stepdaughter was your blood daughter ( can’t think of another way to put it) there would be no question that she would be the major beneficiary of your estate, if you can afford it in terms of your pension then I think giving her the value of the second house makes sense. I would do it soon, partly because they have a current need, but also because a change of government is imminent and who knows what will be brought in re housing and private letting!

I would take some advice though re the tax implications of your gift, both for you and your stepdaughter.

Leave it to who you want it to. Your niece and nephew aren’t entitled to your money, and I’m not sure why you need to ‘compromise’ over your own assets.

I think the best thing is to ask your step daughter what area they'll be looking in and you'll then be able to see what they'd be able to buy for different amounts on Rightmove.

I think that's the only way to get a real idea of the costs.

I think the answer is in your original post.

To you, she is your daughter. Why wouldn’t you help her if you can?

Your money, your decision.

Just make sure your SD protects it via a deed of trust incase she gets divorced.

You do NOT have to explain why you have no biological children or justify yourself

What a lovely step-parent/child story OP, I think you should go ahead - it's your business - and that way you can enjoy the fruits of your very generous gift, including as Granny when you stay there to look after your grandchild.

It's not your parents' business.

You are generous, Op.
It's a great idea.

OP what a nice way to think - genuinely.

What if your niece and nephew also decide to live in a completely unaffordable city and have a child that they (as any parent would) want to have living in a million pound pad?

Would you want to help them out also?

Can I suggest an alternative - why not give all the rental income to your step daughter and leave the residual to the niece and nephew on death? It will help the step daughter save a lot faster and get her where she needs to be quicker and leaves something for the N&N for their future too.

By all means leave it to her in your will if you want, but I wouldn't give away that money now. Yes, she may need, but so might you. With the way the care system is going, you may well need the money for care when you are older.

Could you give her half and neice and nephew a quarter each?

It’s yours to do with as you please. That’s selfish from your parents about your SD not being a blood relative as she is your family. Why not give her money for a deposit and keep the rest yourself. You could end up helping her further if you wish to, or you might need the money for a rainy day.

OP this is one of the nicest posts I have read. I wish my DH's SM cared about him and his siblings even a fraction of what you clearly do. Everyone wants the best for their children and it seems like you want the same for your DGC. If you are in a position to help them out, I think that is so kind of you. I hope I can do the same in the future for my child.

I live in the kind of area you're talking about, in zone 3, and a four-bedroom with a large garden like you're describing is about £1.75 million. I'm sure it's doable for much less though. Good luck, I hope you find a way through that works.

Remember you need to factor in capital gains tax on the profit made since purchase price when selling your house so that might bring the whole amount available quite a bit lower - not sure if you were thinking of just giving your DSD the profit made on the house or the whole amount when it is sold?

It sounds like she is very important to you & it's so nice that you can support her this way if you decide to go ahead.

Most people don't get £150k in cash in one go, but most people have 2 parents growing up which means either a second wage coming in, CMS payments, or a SAHP, all of which amount to something approaching £150k being invested.

Apparently parents are now contributing an average of £15kpa to children's expenses at Uni so that alone is £45k.

There is no law that inheritance must go to blood relations! Would your parents have said the same if you had adopted a child? If you had formally adopted your stepdaughter? You love her as your own child, and I think you should do what you choose with your property. And since you are in a position to do it now, when it will benefit her most, do it!

No one on this thread except you knows enough about their situation to say. And whatever it is, your contribution would be a huge help to them. If you want to do it, you should talk to them about it.

There is no tax on gifts in the UK. The only concern would be possible inheritance tax considerations for the OP's estate if she dies within seven years of giving the gift.

I wouldn't voluntarily give any money I didn't have to to any government. On recent form they would just piss it up the wall or embezzle it in fictional "expenses" paying speeding fines etc. If £40K doesn't matter to you, take sound financial advice and give this money to good causes.

@VeryHappyBunny

What do you mean by good cause?

I'll be honest we aren't a financially savvy family but if by paying £40k in tax (a teachers salary or sick kids health bills) I can give my step daughter £260k then I'm ok with that. Then again I don't mind paying tax, I know it's often misspent but I always just tell myself that it's not my money they are misspending and move on with my life (no way of proving otherwise haha).