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Inherited house part owned

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  • Inherited house part owned

    Good morning

    I am looking for some advice if possible or a point in the right direction of who I can speak to.

    in 2015 my mother died and my brother and I inherited her house. We did originally put the house up for sale as neither of us lived in the area, but after discussions with my brother I moved to the area and into the house and we took it off the market. My children also moved in with me.

    I am the only breadwinner at the moment but have paid all the council tax, bills and maintenance of the house since we’ve lived here.

    My children paid rent to my brother when they were working but these were temporary jobs and although they are looking for work they can’t afford to pay the rent on universal credit. I can’t afford any extra as like everyone am struggling with cost of living etc.

    My brother owns 3 other properties - 1 of which he’s put in trust for his children. He of course also has a 50% share in our mother’s house. He is not interested in the house - just his monetary share and he’s been very patient in waiting for this.

    i believe if I die my share automatically passes to him and his children inherit (I presume my children wouldn’t get anything) but if he dies his share comes to me and I can then pass to my children to inherit?

    He’s also mentioned his properties including this one make up his estate and if he dies there would be inheritance and capital gains tax to pay. Would my children end up with nothing but would still have to pay capital gains and inheritance tax as this house would need to be sold? They don’t have any rights to the house?

    The house is worth around £250k but there is a lot of work that needs doing which would probably increase the value if and when we can afford it. Would my brother be entitled to half of the value if it increased or just half of the value at the time of probate?

    I can’t afford to buy my brother out as I’m told I’m too old to get a mortgage now and equity release is not a good thing for me either (I have looked into both of these). I’m still working full time but my retirement is not too far away so don’t have the option to be able to afford a loan longer term. I also have other debts as well. If I sell then my children and I would be homeless as we can’t afford to buy another house with what we will have left after my brother’s share.

    Is there any options I have and if so, do my children have any inheritance rights?

    Thank you.


    Tags: None

  • #2
    When you die, your share goes in accordance with your will - which may or may not be your children. What you describe is what happens (would have happened) if your and your brother's interests were as joint tenants. You are instead tenants in common.

    As to inheritance tax, that sounds unlikely - but it may depend on what other assets your mother (not your brother) had. Capital Gains Tax is payable on the sale of the house, and is more likely, but would be payable by you as to your share of the increase in value of the house.

    Agree a method of accounting with your brother as soon as you can.

    Comment


    • #3
      Thank you for replying. So my brother and I are tenants in common and I can transfer my share to my children as part of my will?

      i agree with you that I should get the accounting sorted out - either by paying rent (which my brother has said I can do and it will act as an interest free mortgage to pay off my brothers share), or as a mortgage which I’ll follow up again as there may be options I’ve not looked at yet.

      Comment

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