Inheritance

[NimbleViewer]

My sibling and I are due to inherit parents house 50/50.

I have no interest in it both emotionally and practically as it is far too big for me. It is ideal for my sibling and their growing family.

Sibling hoped to buy me out but can't afford it. The ideal scenario would be to gift my share to her but she refuses to beholden to anyone else at any stage.

At the time of finalising things, Can I refuse my share and insist it goes to my nieces as my gift, maybe in trust until they are 21 or will this be fraught with problems.

You just put it on the market, sell it for whatever it will fetch in its current state, and split the money.

That.

Exactly.

If you're sure you will never want your half you can give it to her.

In Scotland, you can certainly sign a document to say that you're refusing an inheritance.

Presumably the sibling has emotional ties to the house

We did very briefly discuss selling it but there are emotional ties and despite no longer being here the parent had hoped to keep it in the family. Selling would be a very last resort.

Could you not sell it to her for what she can afford?

Thats what DH has done with BIL and their grandfather's house. What BIL could afford was about £40k less than it was worth, but that's what he sold it to him for.

That way she doesn't feel beholden because it's not a gift and you can put a value on the fact it's much less hassle to sell between yourselves.

Or sell a part to your sibling for what they can afford giving them whatever % and then gift the rest to your nieces.

You just have to make sure they owning part of a property isn't going to cause your nieces any trouble with finances going forward.

If you’re sure you don’t need it Could you gift it to your sister on the understanding on her death half goes to your heirs , she might find that a more acceptable solution- but understand the agreement isn’t legally binding and there are pitfalls ie she marries and doesn’t make a Will. If you leave in trust for nieces then another can of worms if one wants the money when she comes oif age, bankruptcy,divorce falling out with your sister etc etc

I wouldn’t give it to your niece, that means when she comes of age she will be a home owner and won’t be able to take advantage of any first time buyer help when the time comes (and it’s hard enough to buy a house as it). If your sister can’t buy her out at that point, then she won’t be able to get any money out of the house to use as a deposit and she would have essentially lost first time buyer help for no gain; she will essentially be trapped into the situation unless she wants to go to court and make her mum homeless.

You also have to consider what might happen if your niece were to get married and divorced, her half of the house would be a marital asset and things could get very messy (the ex could use it as leverage to get more of the other assets which would screw your niece over).

The other thing to think about is if she were to fall on hard times, no one knows what the future holds and owning half the house will affect her ability to access help via benefits. Another consideration is if she ever had to file for bankruptcy.

OP, is there a reason why you can’t just keep ownership of half the house on paper but let your sister live in it? Are there any financial implications for you by doing so?

If no one will be living in it, that's a substantial running cost - possibly 200% council tax. Who pays that?
We have been in this position for a while and it was very expensive.

I had something similar when my parents died. Desperate to keep the family home we grew up in, and my sister would have arranged things so I could buy her out gradually. But I decided not to and although it was very hard letting the house go, we were both left much freer to do the things we needed to do. I've never regretted it for a moment.

You can do a deed of variation to renounce your share.

What happens if you give it to your sister and then something happpens that means she ends up selling the house. What if she splits with a partner or decides she wants to move. What if he kids settle in another town and she ends up moving there. Would you still feel ok about having given her half the house?

Well if she can't afford to buy your half and she won't accept it as a gift then she's not leaving much option

Or she could pay you rent

Keep the house and have her pay you rent for your half.

You can loan it to her. I’ve borrowed from a trust set up between me and my siblings. The lawyer drew up an agreement and I paid interest. So I’m sure something similar like this can be done if she can’t afford to buy you out.
However if you want to gift it to her there’s no reason why you can’t. My DH did this with an inheritance he got - he decided his siblings could use the money more than him so it was redistributed. Whether he took the money then gave it or whether he refused it I don’t know.

Can you afford to give away half a house?

so what, £100k at least?

if you absolutely don’t need the money and it’ll make no difference to your life then absolutely give it away.

Are you very rich? Won’t need the money to help you retire a bit earlier, or pay for some good holidays? No children of your own?

I would have loved to keep my DM house. It would be perfect size wise and lovely south facing garden etc etc. lovely memories and could have afforded it too (we would have been downsizing). But realised it was just too much hassle.

I have siblings and just couldn’t figure out a way to buy it without having to sell my current home immediately. It was just too much to take onboard whilst dealing with mums estate whilst grieving. Didn’t want my siblings thinking I was trying to pull a fast one either!

if it comes back up for sale in future I would seriously consider it.

Edited to say it’s sad to say goodbye to your parents house, but I’m glad now as it was much simpler than all the alternate scenarios I was agonising over. Owning two homes is very expensive. Stamp Duty and Council Tax have much higher rates. Plus Capital Gains Tax when you sell!

I think it’s emotional blackmail for parents to tell dc they must keep a house. Unless it’s a stately home. It’s up to them to accept two owners will have difficulties in owning and running it. They should not have strings they pull from the grave. It should be sold if one cannot afford it and the other doesn’t want it. Free yourselves up by taking the money. DN can be given £ if she’s not been remembered by her grandparents and she can make her own choices regarding a home.

Do you own your own house, OP?

If you continue to own a part share there are complications - Capital Gains Tax when it becomes part of your estate or is sold, etc.

I would either persuade your sister to accept it, and do a Deed of Variation to say that it goes to her, in which case it never comes into your ownership - or that it is sold and proceeds split.

Has she spoken to mortgage broker about ways to buy you out?

Are there there assets in the estate that you could have instead of your share of the house, e.g cash?

What is your sister's solution if she can't afford to buy it but doesn't want to feel 'beholden'? Maybe she could pay you rent on your half?

The op will have CGT liability though in the future if she’s got more than one house. She’s also effectively a LL. Unless you can both afford this, the house needs to go. Sounds like op
is rich but Dsis isn’t rich enough.

My Sdad inherited 1/4 of his parents home with them asking that it not be sold.
Eventually due to divorces, deaths etc he owned 6/16 ths or something silly and it caused nothing but trouble
It would have been better to be sold from the start, eventually one of the part owners was able to buy the others out but that caused more trouble with regards to who should pay what