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Original poster

300k Inheritance

13 replies

Headintheclouds212 · 28/09/2023 15:14

From her other set of grandparents, my niece has been given a mortgage-free flat worth £300k.

What should her parents spend this money on? They asked us for advice. She attends prep school (Y4) and will go to grammar in Y7.

Sell the flat and use towards her own house deposit for the future? Keep flat and use rental income towards indie for Y7+, although she could easily get a place in a grammar that does better than indies/boarding in her area?

Her parents live in a modest 3 bedroom, semi-detached and are working to move in the future (somewhere slightly bigger, similar area). So, they see it as a waste to spend this towards their own mortgage/family home.

Thank you!

OP posts:
Cookerhood · 28/09/2023 15:17

How do you know she will easily get a place at a grammar school. Never assume anything!
I would keep the flat, rent it out & invest the money made on rent. Then use the whole lot for property when she is an adult.

OhCrumbsWhereNow · 28/09/2023 15:19

Is the flat somewhere desirable?

If so, keep it, rent it out and use any profit towards a savings fund for university. Then go for the grammar.

headcheffer · 28/09/2023 15:22

OhCrumbsWhereNow · 28/09/2023 15:19

Is the flat somewhere desirable?

If so, keep it, rent it out and use any profit towards a savings fund for university. Then go for the grammar.

Agree. And a prep will literally prep her for grammar.

Quitelikeit · 28/09/2023 15:24

Rent it out and use the monthly money on fees! No brainer

HoHoHoliday · 28/09/2023 15:34

When you say "given", what are the circumstances? Are the grandparents deceased and have left this to the granddaughter in their will? Are they still alive but have given a (very generous!) gift?

If they are alive, I think it's more for them to say how the flat and it's worth is intended to be used. For example, do they intend that she might want to live in the flat when older? Or do they intend for her to benefit financially from its sale?

If they are deceased and this is an inheritance, I think the only reasonable course of action would be to rent it out and keep the money in trust until the girl reaches adulthood.

Spending it on school education might be tempting for her parents, but she may well reach 18, turn around and claim her inheritance has not been used in a way she wished.

mumda · 28/09/2023 15:36

Either it's the niece's inheritance and the parents are looking after it for her (for her benefit not theirs) or it's the parents do do with what they want.

Original poster
Headintheclouds212 · 28/09/2023 15:36

The fees for the indie would be covered by the rent, but the academics aren't great. If she went to boarding (Queen Anne/Stowe etc), the flat would need to be sold as rental income wouldn't cover it.

Is that a flight of fancy that could be avoided by going to Grammar...unsure

OP posts:
TJsAunt · 28/09/2023 16:34

I'd get legal advice. I'm not sure a child can own property and receive rental income. It might be deemed to be part of her parents income for tax purposes.

Pretty sure you'd need to be put the flat & rent/proceeds into a Trust and have Trustees to use the money as you're suggesting with no tax impact.

But am no expert so get advice.

OhCrumbsWhereNow · 28/09/2023 17:27

Looking at the Stoics I have worked with, I'm not sure I'd waste the money on Stowe if she's grammar material...

CatusFlatus · 28/09/2023 17:34

A few points

Children can own property in their own right.
They can have income and have a tax free allowance like everyone does.
If the flat literally now belongs to the child the parents can't just sell it and use the money how they wish. It belongs to the child.
Is there a trust? If so, there will be rules around who can do what.

Get proper legal advice, not from Internet randoms.

JustAMinutePleass · 29/09/2023 00:56

Aim for grammar, save rental income - it can pay for uni

Fifthtimelucky · 29/09/2023 09:16

Keep the flat, rent it out. Best scenario, she attends grammar school and they save the income for university, which might mean she'd never need to take out a student loan. Then when she gets a job she moves into the flat or sells it and buys something more suitable.

If she doesn't get into the grammar, decide whether the income might be better spent on an independent. I definitely wouldn't sell the flat just so she could go to boarding school though.

hazelnutlatte · 29/09/2023 09:26

I expect that there is a trust sent up which is why the parents get to make this decision. We inherited a similar amount for my dd and the money is in a discretionary trust - so we could choose to spend it on education if we wanted.
My dd got into grammar school (we were far from certain that she would) so we decided that was the best option. The local private school is very nice and has good results but we decided on balance that it was best to keep the money for when she is an adult, then she can decide for herself (with our guidance) what to do with it.

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