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Original poster

Fil signing over property, impact first time buyers

78 replies

Changeychangee · 02/02/2023 18:28

We are hoping to buy in the next year or so. Purchase has been massively delayed by half a decade due to DH debt/furlough period.

FIL has decided to sign over his property, value circa 100k, to DH/SIL in life while remaining in residence.

This would mean that we go from being first time buyers to second time purchasers.

I am worried about

a) losing h2b isa bonuses 6k if buy under 250k and stamp duty costs if buy over 250k.

b) increased interest rate on our mortgage.

c) capital gains tax on second property when eventually sold.

c) SIL in the process of divorce from BIL who has money issues - FIL may end up out of home if sale forced by BIL.

d) claw back via deprivation of assets if FIL goes into a home.

I feel I have a valid concern about the potential costs to us over mortgage term substantially reducing the benefit of anything DH gets.

How would you handle this, am I blowing this out of proportion? What ways around this would you suggest??
I’ve already thought FIL could sign over to our DC instead or I could purchase a smaller property on my own rather than go in with DH.

I am already due to provide 85% of a six figure deposit and pay half the mortgage. I feel this is potentially another financial hit from DH side and I feel pinched enough as it is.

OP posts:
TeenagersAngst · 24/04/2023 06:43

I think you have to refuse to buy with your DH until this drama is settled. He doesn't sound like he's on your side anyway?

tribpot · 24/04/2023 06:45

Is SIL's divorce finalised? Surely it was unbelievably stupid for FIL to have put his savings into her name before her financial settlement.

Certainly don't email SIL, she isn't interested in the impact on you at all. Unfortunately, neither is your DH.

I think you need to use some of your deposit money for a discussion with a lawyer about how to limit the damage to yourself and your DC if DH goes ahead with this.

LittleBrenda · 24/04/2023 06:47

Maybe your SIL intends to care for father in his dotage.

There is absolutely no chance of getting away with this scheme from a DOA point of view as he in his late seventies. Someone in my family tried to do this earlier and more skilfully than your FIL and they were still 'caught'. This is the exact scenario of why there is a deprivation of assets rule!

Another downside of it is if your FIL says he has no money to pay for his care he loses control of that care and ended up where the council put him.

PleaseJustText · 24/04/2023 06:48

While your FIL is alive, he can do what he wishes with his money. Unless you both have concerns your sister is taking advantage of your FIL and he doesn't have the capacity to make financial decisions, there is nothing a solicitor can help you with.

Original poster
Changeychangee · 24/04/2023 06:49

@TeenagersAngst I’m not sure what to do at this point. His relationship with his family, in the sense that they can do no wrong, is difficult for me.

I have received inheritance, so he feels he is entitled to his without interference. The difference being the person I’ve received from is actually dead and there are no complications, only positives.

OP posts:
SeatonCarew · 24/04/2023 06:50

I'm not clear why you are still with your husband OP. He seems to disrespect you repeatedly. More importantly, are you clear why you are? I certainly wouldn't be buying a house with him at this time. Sorry to be so negative, but I think you need to think very clearly right now.

TheaBrandt · 24/04/2023 06:54

If he keeps living in the house it’s still part of his taxable estate.

If he needs care there’s a risk it could be clawed back due to deprivation of assets.

if he’s widowed he gets £1m tax free allowance for iht anyway.

Puttibg himself at massive risk if he falls out with his kids / they divorce. Always advise clients not to do this it’s daft.

Original poster
Changeychangee · 24/04/2023 06:55

tribpot · 24/04/2023 06:45

Is SIL's divorce finalised? Surely it was unbelievably stupid for FIL to have put his savings into her name before her financial settlement.

Certainly don't email SIL, she isn't interested in the impact on you at all. Unfortunately, neither is your DH.

I think you need to use some of your deposit money for a discussion with a lawyer about how to limit the damage to yourself and your DC if DH goes ahead with this.

@tribpot no it is far from finalised. I don’t know how long this arrangement has been going on. My main concern is that a similar arrangement hasn’t been made for DH.

I’m now considering I may have to buy on my own.

OP posts:
Ilikewinter · 24/04/2023 07:05

Oh what a mess OP. I dont really understand your SIL desire to have all this money from FIL whilst she is divorcing, is she not aware she could lose some of it??. ...... well given what you're posted here I don't think you can answer that!. I would be very wary of buying your home right now.

YellowDots · 24/04/2023 07:10

How much would your stamp duty increase in actual money from the FTB to the second home amount? Perhaps that might put some reality into the situation for your dh.

TeenagersAngst · 24/04/2023 07:17

Changeychangee · 24/04/2023 06:49

@TeenagersAngst I’m not sure what to do at this point. His relationship with his family, in the sense that they can do no wrong, is difficult for me.

I have received inheritance, so he feels he is entitled to his without interference. The difference being the person I’ve received from is actually dead and there are no complications, only positives.

I would tell DH that you can't buy with him due to the financial implications of what he is proposing. Don't mention his family if that's a trigger for him, put the responsibility on to him for making a poor financial decision for your family (you, him and the DCs).

SheilaFentiman · 24/04/2023 07:20

I would seriously thinK about whether you want to be in a marriage with someone who won’t discuss perfectly reasonable financial concerns with you.

alpacamaraca · 24/04/2023 07:21

Apologies if this had already been mentioned OP, I've not RTFT. A second property also incurs additional stamp duty so you need to take that into account.

Ilikewinter · 24/04/2023 07:23

alpacamaraca · 24/04/2023 07:21

Apologies if this had already been mentioned OP, I've not RTFT. A second property also incurs additional stamp duty so you need to take that into account.

Yeah thats a good point, i don't think that's been mentioned before.

SheilaFentiman · 24/04/2023 07:23

And if FIL has been saving money for SIL not DH, you probably need to steer clear of that one. Focus on the decision ie house gifting that impacts your house purchase

MidgeHardcastle · 24/04/2023 07:28

I would have thought the solicitor would recommend some sort of trust. That way, afaik, it means it won't impact anything of yours or sil's while he's still alive. Don't understand why a will wouldn't cover 50/50 splitting unless he wants the maintenance costs of the property to fall to you. And yes, surely risky if sil isn't divorced yet?

Original poster
Changeychangee · 24/04/2023 08:40

YellowDots · 24/04/2023 07:10

How much would your stamp duty increase in actual money from the FTB to the second home amount? Perhaps that might put some reality into the situation for your dh.

@YellowDots its somewhere between 5-7.5k for stamp duty, we would lose ISA bonuses too and have increased mortgage costs.

OP posts:
Original poster
Changeychangee · 24/04/2023 08:43

MidgeHardcastle · 24/04/2023 07:28

I would have thought the solicitor would recommend some sort of trust. That way, afaik, it means it won't impact anything of yours or sil's while he's still alive. Don't understand why a will wouldn't cover 50/50 splitting unless he wants the maintenance costs of the property to fall to you. And yes, surely risky if sil isn't divorced yet?

@MidgeHardcastle I haven’t been involved in any discussions with solicitor so I don’t know what’s been said. I read something about a trust and thought it might be an idea but I don’t know enough about it as yet.

OP posts:
Original poster
Changeychangee · 24/04/2023 08:53

Changeychangee · 24/04/2023 08:40

@YellowDots its somewhere between 5-7.5k for stamp duty, we would lose ISA bonuses too and have increased mortgage costs.

Show quote history

It’s actually worse!! Calculated for second stepper, additional property is 15.5k+ 😱

OP posts:
Ilikewinter · 24/04/2023 09:01

Oh wow!. Id make this very clear to your DH and if he cooses to still go ahead then Id be seriously rethinking the relationship.

BarbedButterfly · 24/04/2023 09:07

Sorry OP but I would be telling him that if he goes ahead with this your relationship is over. For me he is willing to screw over your future and your family to please his sister and I couldn't live with that.

I would buy alone but after you divorce or it is a marital asset

drpet49 · 24/04/2023 09:14

Northernlurker · 02/02/2023 18:47

Never mind your position, this has to wait till sil divorce is through! Surely he can see that?

This! He would be extremely stupid to not wait.

TreesandFish · 24/04/2023 09:26

I’m now considering I may have to buy on my own.

If you do this, you'll have to make sure your marriage is very strong. You don't want to end up losing half a house to your ex

BaronessEllarawrosaurus · 24/04/2023 09:46

TreesandFish · 24/04/2023 09:26

I’m now considering I may have to buy on my own.

If you do this, you'll have to make sure your marriage is very strong. You don't want to end up losing half a house to your ex

Its half a house or half the savings. If he's part owner in another house then it actually gives the op a fighting chance to keep the family home in a divorce.

Princessglittery · 24/04/2023 09:48

@Changeychangee you definitely need independent legal advice. IANAL but I understand if you ring fence an inheritance you, may just may, be able to protect it in a divorce.