Complicated...Legal and Tax!

[bjazzy]

Facts

1. Property owner is a pensioner, lives in the home with her spouse and is the sole owner of the property. The property was owned before her marriage. The spouse has never contributed to the repayment of mortgage.
2. The home value is c£320k, mortgage outstanding £70k with term expired, interest only repayment on SVR continue to be paid.
3. Pensioner also has 2 small properties which have equity to pay the mortgage but she is unable to sell them.

The property owner is desirous to gift/sell the property to her nephew and in return wants the nephew to pay the outstanding mortgage of £70k. She does not intend to bequeath any of her assets including the home she stays in to her spouse and intends to continue staying in the house. The nephew does not intend to stay in the house.

Question:
What is the most efficient (duty/tax) and legally watertight manner to ensure the spouse does not contest the right over the estate bequeathed by the property owner. We have been told that since the spouse is staying in the house, he could legally contest the will.

1. Should the nephew gift the £70k and the owner write a will and would that be risky since the will can be changed/contested?
2. Can the nephew pay the £70k, and stamp duty on the market value to get the property transferred? Would there be deemed rent implications and therefore tax.

Appreciate the issue needs to be evaluated from a tax and conveyancing standpoint, any lead would be very helpful
Tia

[atticus]

Tia, if there is a lot at stake here, you really should sek advice from experienced and insured professionals.

[Pezza54]

Look at www.samconveyancing.co.uk website regarding loan agreements between family members.
The nephew could loan his aunt £70k, secured by her main property and the loan plus interest repaid on the sale of the property (which could be delayed if his aunt predeceases her spouse). Her will would need careful wording by an experienced solicitor to ensure her nephew inherits her property and her spouse can continue to live there if he is still alive.
This is just one option but worth looking into.