dh is talking to fil about future finances,wills, house selling & legal stuff.

[jimijack]

I've come out of the way. Non of my business, so I'm leaving them to it.

So bil lives with fil. Fil owns his house & bil wants to buy it & buy dh out of it.

He has been to find out about a mortgage & can have one, he is seeing a solicitor 're the legal side of things which is all good.

Thing is dh controls all of fils finances, fil is useless, shite and cannot be trusted with money.
This has worked well for the last 2 years since mil died.

Dh can't wait to hand it all over to bil but the fact is I don't think that bil can afford to run a house with bills, mortgage etc.

Currently pays nothing towards the household bills. No rent, nothing.
Dh wants to discuss what the most sensible option is to do with this money. I don't think that he is going to get a penny.

I can see trouble ahead sadly.

Anyone with any experience of this?

I can't offer any advice on your particular circumstances but where is your FIL going to stay when your BIL buys his house? I'm assuming your late MIL left your husband and brother her share of the house? Is this why your BIL needs to buy your DH out? Your local authority will look kindly on 'loss of assets' if your FIL does need to go into a care home within 7 years of the sale. If your DH has power of attorney over your FIL's finances this will not change. How your BIL manages his own finances is up to him and not really your problem. I'd be more concerned about your FIL's future.

Just to add, make sure you get a couple of independent valuations of the house to ensure your brother in law pays a good market value, and not the amount he feels it's worth. My friend's Mum had to go into a care home and they needed to sell her house. It was valued at £280k and they sold it to their brother for £240k PLUS he still gets a quarter share of the estate when she does eventually pass on! Families eh?

If BIL is buying the house at market value then there is no deprivation of assets for care home fees purposes as FIL will simply be swapping one asset ( house) for another ( cash). However if he then gives the vash away that would be considered deliberate deprivation. There is NO seven year rule as far as care home fees are concerned. People often get confused with inheritance tax here. Yes you can give assets away for IHT purposes and as long as you live for 7 years and the giver doesn't retain any kind of benefit ( such as continuing to live in a house they have "given away" then they fall out of your estate. With care home fees there is no time limit. The LA can go back 20 years if they feel it's appropriate.

If your DH owns part of the house but doesn't live in it then he will have to consider capital gains tax on the sale to his brother. If the property has risen in value since he acquired his share in it then CGT will be due on the gain. He has an annual allowance of £11k pa to offset against any gain.
If he sells to his brother at an undervalue then he will still be assessed to tax as though he had sold at market value because his brother is a related party and the transaction is not considered to be at arms's length. In the example given by MrFox above there is potential evasion of both CGT and SDLT as well as deliberate deprivation of assets ( effectively a gift by mum of £40k to brother) so not a route I would recommend.

Does your DH have power of attorney to deal with FIL's finances ? If not I would recommend he gets one while FIL still has capacity.

Take professional advice on the purchase for all the reasons outlined above.

Huge Thank you for the replies, very much appreciated.

As it stands dh does not have power of attorney. He does however have full control over fil s finances.
This is because fil is a very bad debtor, has brought them to near destitution on several occasions over the years.
Mil asked dh to take over from her when she was dying (mil had full control)
To be clear, fil is in full agreement about his.

Bil lives in the house, but currently pays nothing at all towards the property, no rent, no bills nothing. Fils wages & pension pays for it all. Bil has no idea about bills in ADDITION to mortgage payments.

Dh ensures all bills are paid plus fil has a weekly allowance. It works well.
Bil wants to buy the house at full market value and fil will be living in the house for as long as he wants.

They are all speaking to a solicitor in the next couple of weeks to ensure that everything is above board and within legal constraints.

These things never go well though do they.