Struggling to buy mum out of house

[Tryandtryagain02]

Hello, I'm really struggling with a solution here, any ideas would be welcome! My mum and I inherited my Grandparents house 50/50 in 2021. I agreed to buy my mum out of her half, however, I haven't got very good credit. The mortgage broker tried multiple lenders who dealt with bad credit and unfortunately I was refused. Subsequently, my mum had a contract written with a solicitor that suggested I pay her rent (£550 a month) as this is the equivalent to half of what the rent would be and so we agreed. The rent is to be paid for 2 years and if I don't buy her out within this time then it has to be sold. It has caused endless arguments and ruined our relationship. I've sought advice from a solicitor who said that it would be enforced and my partner and our 3 children would have to sell. Every couple of weeks she gets angry and insists I sell the house as I won't get a mortgage. I've searched for other properties to buy and nothing is within my price range, renting is slim to none in my area and I'm running out of ideas of what I can do. The mortgage broker told us to go back in 6 months as they declined due to a loan I had taken out - which is now paid off. But I worry every day that when we do reapply we will be declined and I have no idea where we will end up. Does anyone have any other ideas please?

Thanks

Yep i know. Im irish 👍

Inheritance tax is 33% on anything over 32,500
So 42,500 taxed at 33%

So you'd have had 61k on the 75k.
Invested for 10 years at 4% would be over 90k and 4% is conservative my isa funds are averaging over 9% for the last decade.

She can force a sale on the uk property if you dont buy her out.

Like i said your mother is legitimately awful but unfortunately you have made a series of poor choices which now you (and your children) will bare the brunt of that as you dont have recourse.

If you inherit property, money etc you have to pay inheritance tax if the amount is over the bracket threshold. In Ireland, Grandchildren have to pay 40% inheritance tax on any monies or assets worth over 32,500 euro. Whereas, for children the threshold I think is 325,000 euro or there about. So because the house was worth about 150 thousand euro and my share would be worth 75,000 it is over the 32,500 threshold meaning the house would have had to be sold in Ireland and 40% would have been taken for inheritance tax. This is why the solicitor explained I could sign the whole house over to my mum as it is worth 150 thousand euro and would not be over the 325,000 euro threshold for children. I hope I've explained that well.

I thought it was 40% but this was back in 2021. Agreed, it was a bad decision to make but I was 28 years old with NO advice and naively thought it was beneficial to sign it over.

This is totally unfair on your mum. She has her inheritance locked up in your home and in three years you have not been able to solve the issue
sell up and privately rent somewhere else. It’s not ok for you to carry on like this - effectively paying only £500 rent for a whole house , and stopping your mother enjoying her inheritance in her final years.

I don’t know how you could have enough for a mortgage if you haven’t been able to manage, all this time while living rent free and then on 50% of market rent cost.

If I was your Mum, yes, I would give you more time, and would be appreciative of £500 pcm income.

But I would be encouraging you to be way better at managing your money.

We have enough for the mortgage, it was my bad credit and a loan I took out. The lenders also weren't happy about lending money on a house that was inherited and already mortgage free is what the broker said?!

So who has power of attorney, OP?

Can you challenge the solicitor who advised you to give away £75k in order to avoid paying 30/40%tax on 40k?
You saved £15 or £20 k by giving your mum £75k.

Have you reminded her she owes you £75 k and with that you'll be able to put down a deposit and move out? Suggest she pay you back the £75k in instalments, by not taking rent, so you'll be blessed to pay back the difference quicker. The monthly rent should at least be coming off her share of the house.

Can you find out how much it would cost her to force a sale and get you evicted?

I think you need legal advice. I think it's worth paying for it.

Did you know she was awful before this?

I'm not sure if I could challenge the solicitor. Honestly, I've tried to compromise with my mum over the house in Ireland and it results in nothing but abuse and a huge argument. Yes, I sought advice already and the solicitor said that if she was to force a sale through court over here he expects it to cost me (if she won, which is likely) about £20 thousand and it would cost her nothing. If I won which is very unlikely then she would pay about £20 thousand.

I knew she was awful before this, yes. But, all our extended family are in Ireland, my mum has no siblings, our family unit here in the UK was small. I was utterly heartbroken both Grandparents died within a year of each other and just didn't think about the consequences of signing it over or thought to seek legal advice and she is my closest family member. I was very stupid, but I didn't think she would do this.

I've tried to read the thread but I still don't understand why you felt you had to sign the house in Ireland over to your mum and therefore basically give it to her. I understand about the tax but surely if you couldn't afford the tax the house should have been sold so that you could pay it and also have some capital. It kind of sounds as though you have been conned out of it - verbal agreements don't mean much. If you'd had money from that house and then money from this other one you'd have had enough to buy a house outright. As for not selling the grandparent's house because they wouldn't like it - if they didn't want it sold they should have left it to one of you and not both of you as it just complicates things.

Did he also explain this meant you had no right to any of the equity in the house? I don't think you could even argue that you didn't intend to sign over ownership because then you'd be admitting you did it simply to avoid paying tax. I think this would be considered tax fraud but INAL.

I think you should definitely book at least one appointment with a good solicitor and see what they say.

I'm so sorry. Your mum is unreasonable. However it is what it is. Stump up for a lawyer to see whether you have any recourse. And let it go. You really have no choice.

I didn't actually ever go to see the solicitor as he was in Ireland, anything I received was through the post, whereas, my mum did go to see him. It is all perfectly above board but I should have sought advice prior to this.

If you didn't actually meet with him are you sure that was his advice? It sounds quite dodgy in that he apparently advised you to do something very detrimental to you.

If it was 21 i think you may be able to challenge the solicitor.
Did you sign anything???

You also need to think about whether or not you are willing to play hard ball with your mum.
Id be looking to get a current valuation on the ireland place and trade that off against the house in the uk.
Have you paid off the debt yet? If not, get selling on vinted and looking into ways to cut your outgoings or up your income

How much is the uk house worth?

@TemuSpecialBuy How do I challenge the solicitor? Yes I signed something and posted it back to him, well my mum did. No, I haven't paid off all the debt. But selling on Vinted is a very good idea and more are welcome please. The house is in the UK is worth about £280k.

Now that I’ve read your updates, I’ve changed my mind and decided that your Mum is being awful!

You signed over your 50% share of the house in Ireland to her.

You're paying 50% rent to her PLUS all the council tax and house insurance. As the co-owner, she should be splitting those bills with you. So you’re paying her more than 50% rent.

I honestly think that you should write down everything that’s happened and see a solicitor. Given what you’ve signed over and paid her already I don’t think you owe her half the value of this house now.

@Tryandtryagain02 You need to read what has written again. I own half the house in Ireland (kind of). We didn't pay rent for a year as my Grandfather was still alive and wouldn't have expected me to pay rent. I currently live in the property, my mum owns her own home and owns another property in Ireland. Therefore, my mum now owns the whole property in Ireland. your story is actually all mixed up! no wonder people are confused!!

I know, apologies for that, I have explained it terribly. I just wanted advice on how I could get a mortgage on this house and didn't think the rest would be useful. I love my mum and feel guilty even doing a post about this tbh but I just wanted to see if anyone had any other ideas on how I could attain a mortgage on this house.

If the uk house is 280k. You need 140k...

€61k would be about 50k sterling so 90K morgage which is much more appealing to a lender as lower ltv.

Personally...
Stop trying to be nice she doesnt gice a shit about you or your kids.
Every time you feel bad remember she is taking money from her child and your CHILDREN and doesnt care.

Id contact the solicitor and request copies of the documents you signed and also request a meeting (zoom or simialr)
Ask them to explain their actions and guidance given.
If they say "your mum instructed us you were fine with it" or whatever. Ask about their duty of care to you.
Explain you didnt understand what you were signing and believe you werent advised correctly and are considering contacting the ombudsman.
Then stay silent and let them talk.
Ask how you can revoke / void the papers.
Be sure to record the call as advise them you are recording.

(link if you want to complain - you should btw!
https://www.lawsociety.ie/Public/Complaints-against-solicitors )

There's a really good solicitor in london who specialises in anglo / irish law cliona o'tuama (google her) she Is EXCELLENTand it may be worth a chat with her. She helped me with MESSY probate across uk and ireland she'll normally have a chat for free.

Have you seen a mortgage broker? They’re the best people for securing mortgages in cases like this.

I would also gice someone like london and country a call.
they are a good start point for mortgages. 3k on a credit card shouldnt prevent a mortgage

Can your DP get the mortgage on his income and buy your mum’s half?

That is not how it works though, someone should have been making the best decisions for him. Not charging rent was not in his best interests. Although I can see it benefitted you enormously.

I’m not sure about this but I think it might be that unless the grandfather or a family member was living in the house the cost of his care might have been deducted from the value of the house. That might be why OP was offered the house rent free.