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Ask Clare Your Own Question
Clare
Clare, Solicitor
Category: Property Law
Satisfied Customers: 34108
Experience:  I have been a solicitor in High Street Practise since 1985 with a wide general experience.
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My husband left our house 50% to me and 50% each to our sons I

Resolved Question:

My husband left our house 50% to me and 50% each to our sons
I need to move to a retirement village and can do this without selling the family home
My son and his wife are considering moving to the house as he/they already own 25% and upon my death would inherit half of my existing 50% ie another 25%
Could my son buy his brother out of his 25% share by raising a mortgage?
or
Could I rent the house yo my son and treat the rental payments as a capital repayment over the years like a mortgage?
I would appreciate your advice
many thanks
***** *****
Submitted: 1 year ago.
Category: Property Law
Expert:  Clare replied 1 year ago.
HiThank you for your questionMy name is ***** ***** do my best to help you but I need some further information first.Does your son wish to raise a mortgage immediately?
Customer: replied 1 year ago.

Hi Clare

He already has a mortgage and lets his house out

when he married he went to live in his wife's house

he wishes to either buy his brother out by way of mortgage

or rent from me and him using his rental as a mortgage payment to buy further equity in the property

the grannie flat attached to the property is let at £595 per mth

the whole property is worth £575 - valued today

split say £475k for the main house and £100k for the slf contained annex

i look forward to your reply

many thanks ***** *****

Expert:  Clare replied 1 year ago.
Would he be just buying his brother's current share?
Customer: replied 1 year ago.

sorry to be slow had a visitor

yes just his brother's share

Expert:  Clare replied 1 year ago.
For clarity then, he would own half of the house - and would pay you rent for your half?
Clare and other Property Law Specialists are ready to help you
Customer: replied 1 year ago.

Correct

using the mortgage to buy out his brother

Customer: replied 1 year ago.
Yes and would use the mortgage to buy his brother out
Expert:  Clare replied 1 year ago.
If your son has to get a mortgage then the property will have to be transferred into his sole name Your interest can be protected by way of a Declaration of Trust confirming that the property is held on behalf of you as well.As to what you do with the rent that is a matter for you - but as part of your Inheritance Tax planning you may wish to consider gifting his share to him now instead.I hope that this is of assistance - please ask if you need further details
Customer: replied 1 year ago.
Thank you - very interesting
Conversely, could the deeds, which are still on my and my late husband's name, be changed to reflect his will ie house owned by me and both sons
Then son and wife move into my/their house but not sell the wife's, letting it out? This would be self funding with a small profit.
Son and wife paying me a 'rent' during my lifetime which could be treated as a mortgage buying a further part of the equity.
The calculations regarding proportions and values of the property share being decided upon my death.
This would mean number 2 son would retain his share in an capital improving asset. No 2 son and family are Australian citizens but move today to the USA for 2 years.
If this is viable, which option is best for a) me b) my sons and c) interitance tax planning
Thank,you in advance for your advice
Expert:  Clare replied 1 year ago.
Yes you can do this and transfer the ownership of the property to reflect the agreement under the WillYou can also treat his "rent" as being purchase monies if you wish
Clare and other Property Law Specialists are ready to help you

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