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Original poster

Buying a property in joint names with a dc

33 replies

Canibuyahousethisway · 23/04/2023 21:09

I’m a widow , one adult child who does not own a property.
I am assuming the next move will be my last and wondered if it’s possible to buy the house jointly with my dc, with me providing all the purchase price?
My thinking is that when I die I’ll leave half a house which should fall below Inheritance tax threshold, whereas the whole house will be over it.
Anyone know if I can do this? DC won’t live in the house with me.
Thanks for any advice.

OP posts:
Ilikewinter · 23/04/2023 21:12

What would happen if your DC wanted to buy a property of their own in the future?

SquareRootOfAllEvil · 23/04/2023 21:14

It’s possible, but you definitely need to take legal advice.

Does mean that your DC wouldn’t be eligible for the first time buyer advantages when / if they come to buy a place of their own - couldn’t use a LISA, wouldn’t benefit from reduced stamp duty etc.

savoycabbage · 23/04/2023 21:14

Your dc would never be able to benefit from first time buyers offers. If they never lived there it would be deprivation of assets if you needed care when you were older.

StillWantingADog · 23/04/2023 21:17

My dad did exactly this with me. I was never on the mortgage but the house was in both of our names on the land registry. The house was later sold- I never paid a penny.

however PPs are right that you need to look into the consequences regarding your dc’s future purchases. If that is likely to happen.

SlipSlidinAway · 23/04/2023 21:25

How much is the house likely to cost? You acquire your deceased spouse's IHT allowance , so that's £325k x 2. Plus there's a further allowance if you leave your property to your child - I think £175k.

BHRK · 23/04/2023 21:27

Yes you can do this, my parents did. You need to seek legal advice on how it works though. And it has to be done at a time when you’re not anticipating needing any care you’d have to pay for

Original poster
Canibuyahousethisway · 23/04/2023 21:33

SlipSlidinAway · 23/04/2023 21:25

How much is the house likely to cost? You acquire your deceased spouse's IHT allowance , so that's £325k x 2. Plus there's a further allowance if you leave your property to your child - I think £175k.

Thanks everyone , you’ve given me a lot to think about.

@SlipSlidinAway I don’t understand IHT. DH died a long time ago and didn’t own a property at his death, I did. ( complicated situation)
So if I died and the house was worth 450k ( in my name only) HMRC would deduct 325, then deduct 175 so no Inheritance tax to pay ? And dc would get the house outright then?

OP posts:
SlipSlidinAway · 23/04/2023 21:48

Your dh's individual IHT allowance passed to you on his death (it doesn't matter whether or not he owned property). So when you die, your IHT allowance and your dh's will be applied to the total value of your estate (property, cash other assets). That's £650k. If you leave a property to a child, a further allowance of (I think) £175k is applied. That makes a total of £825k before your estate attracts IHT.

Itsanotherhreatday · 23/04/2023 21:51

Ask a solicitor about putting the house in trust to your children.

MooseBeTimeForSnow · 23/04/2023 21:52

Bear in mind as well that your child’s “share” of the house would be an asset if they were to marry and divorce.

Original poster
Canibuyahousethisway · 23/04/2023 22:14

@SlipSlidinAway ThNk you for that explanation.
@MooseBeTimeForSnow aagghh hadn’t thought of that. Thank you.
@Itsanotherhreatday I’ll add that to the list of questions for the solicitor.

Many thanks everyone for your wisdom. Finding the decision to move stressful and it’s not got going yet.

OP posts:
ArcticSkewer · 23/04/2023 22:16

Have a quick chat with a solicitor. Am not a solicitor so the below may be slightly inaccurate.

Usually, no matter how long ago your dh died, he would be assumed to have the 325k plus 175k allowance, so you could use your allowances plus his to make a total of up to £1million (£350k of that would be from the value of your current or future house - if it's worth less than that then they get a smaller allowance).

If your whole estate is only worth £500k with at least £175k of that in your house then you should be fine anyway.

If you buy in both names I would get advice first. There's a few complications there to discuss with a solicitor.

rkhumo · 23/04/2023 22:21

Don't do this.

My MIL did this to my DH, when we came to buy our own house we lost all the benefits you get as a first time buyer, so had to find a massive deposit AND stamp duty - (which you don't have to pay up to X amount as a first time buyer).

rkhumo · 23/04/2023 22:22

rkhumo · 23/04/2023 22:21

Don't do this.

My MIL did this to my DH, when we came to buy our own house we lost all the benefits you get as a first time buyer, so had to find a massive deposit AND stamp duty - (which you don't have to pay up to X amount as a first time buyer).

Just too add, it delayed us buying a house for 2 years.

It's all well and good leaving them half or whatever for when you go, but that won't really help them then.

titchy · 23/04/2023 22:28

Unless the house you buy is worth over £1m there's no point- passing a house to a child is IHT free up to that amount.

Other than meaning your child wouldn't qualify for FTB stamp duty, they may also be liable for capital gains on the sale of your house.

So buy a house for less than £1m and spend the rest!

YetMoreNewBeginnings · 23/04/2023 22:37

MooseBeTimeForSnow · 23/04/2023 21:52

Bear in mind as well that your child’s “share” of the house would be an asset if they were to marry and divorce.

It could also be a factor if they get into debt or go bankrupt.

Plus if they need help from certain benefits at any point.

Jellybean23 · 23/04/2023 22:42

If your DC marries and then divorces at a future date, the ex is entitled to a share of the property.

LittleBrenda · 23/04/2023 22:43

My aunt did this when she got divorced. She bought her ex out of the house and put the ex's half in her sons name.

When he was 25ish he decided he wanted the money to buy a house to live in himself and forced the sale of the house leaving my aunt absolutely screwed. She ended up having to tell the home she'd lived in for years and years and she had to buy a smaller home. And of course the relationship between them never recovered.

From his perspective, it was half his house and he wasn't living in it. He genuinely thought it was fair enough that they sold it and both bought smaller houses.

lavagal · 23/04/2023 22:47

@SlipSlidinAway is this correct? We are about to sell my nans house following her passing. My mum ( her daughter) has been told that my grandfathers tax free allowance was passed to my Nan, but on her passing his and her tax free allowance are not passed to my. Um . That ends with my name death. There is however a separate slightly higher threshold for passing the property to their child....but it's not as high as the two single allowances combined therefore mum will now have to pay some inheritance tax

Soontobe60 · 23/04/2023 23:01

lavagal · 23/04/2023 22:47

@SlipSlidinAway is this correct? We are about to sell my nans house following her passing. My mum ( her daughter) has been told that my grandfathers tax free allowance was passed to my Nan, but on her passing his and her tax free allowance are not passed to my. Um . That ends with my name death. There is however a separate slightly higher threshold for passing the property to their child....but it's not as high as the two single allowances combined therefore mum will now have to pay some inheritance tax

Unused IHT allowances can only be passed on from one spouse to the other. Currently, upon the death of the first spouse, their allowance (£325k) passes to their widow / widower. Upon the death of the second spouse the total allowance can be used against their estate. That is £650K. (Nil rate band).If the second spouse is passing their estate, INCLUDING their house, to their child / children, there is a further £350K (Residence Nil rate band). So thats a total of £1m before any IHT needs to be paid.

In your case, your grandfather would have a NRB on his assets passed to his widow - your gran. She would then have her NRB on her assets which, if shes passing on her house to your mum, their daughter, and the value of her assets including the house is below £1m there will be no IHT to pay. Then it stops.

Soontobe60 · 23/04/2023 23:04

@lavagal to add to the above, when your mum dies, there will be IHT to pay on her estate above the £325k threshold unless she passes her property on to her children in which case a further £175k is added. If your mum has her house worth, say, £250k and receives £400k from your grandmas estate, she may well end up having to pay IHT when she dies as her estate will be worth over the threshold of £500k.

lavagal · 23/04/2023 23:11

@Soontobe60 Thankyou
House if goi g to be sold and asking price of £590 but mum is considering g an offer of £575 as she says 40% is going in IHT anyway so not worried about holding out for the higher price

The house is the only real asset notice in the bank so I think she's possibly not understood what she's been advised?

lavagal · 23/04/2023 23:12

@s

lavagal · 23/04/2023 23:13

@Soontobe60 sorry what does NRB mean please

Dortmunder · 23/04/2023 23:31

lavagal · 23/04/2023 23:13

@Soontobe60 sorry what does NRB mean please

Nil rate band