Hello and thanks for using Just Answer.
My name is ***** ***** am happy to assist you with your enquiry.
Could you confirm if you would need to raise a Mortgage on your Grandparents property in order to buy it for £250,000?
I look forward to hearing from you.
Thanks fo ryour reply- sorry for the typo!
I am glad you don't need a Mortggae as that would scupper things totally.
Right, the way forward would be-
1. You would need to grant your Grandparents a "Lease for Life", meaning they could remain living in the property until the survivor of them die/decide to vacate permanently.
2. You also need to grant your Grandparents a private Charge (like a Mortgage) setting out the terms on which you intend to repay your Grandparents the additional monies/ confirming the monthly payment of £300.
You and your Grandparents will need to instruct separate Solicitors for the above.
As rgeards Inheritance Tax, this will only be a factor if your Grandparents joint estates come to more than £650,000 (to include the full value of the property). If it did (which I don't think it will!), the full value of the property may be taken into account, as the transfer to you may be seen by HM Revenue & Customs as a "gift with a reservation" (ie your grandparents have sold their property to you at an undervalue, but have retianed a benefit in it, by remaining living there). The full value of any asset deemed to be the subject of a gift with a reservation is taken into acoc**t upon the parties death even if the transfer was made over 7 years ago. As I have said, I don't think this will be an issue, unless your Grandparents subsequently win th elottery!
As rgeards the Capital Gains tax position, on the basis that you own your own home, you will be deemed to acquire your Grandparents property at the market value. You should thereofr eget a professional valuation from a Surveyor. Then, as and when the property is sold, you would be liable for CGT on any profit made, subject to your annual exemption. You should discuss this with your Accountant, please.
I hope this assists and set sout the legal position.
If i have helped, I would be grateful if you could rate my answer.
I'm not an Accountant, but you don’t pay CGT when you sell your home if all of the following apply:
You are therefore going to be liable for CGT, on the basis that either you won't be living there or you acquired the property on the basis that you would make a gain.
I hope this assists.