downsides of family home being in all the family names

studdlymurphy

Hi all,
Looking at a house transfer as a gift. To keep the tax to a minimum the tax advisor suggested gifting to the whole family. 2 adults and 3 kids all under 5.
In it have a clause that the kids cannot force a sale or force out the parents if there was ever a disagreement.
Are there any unforseen reasons that this would be a bad idea?
First time buyers grants for kids if they partially own a house?
If the kids decide that one will live in it any is there cgt due to the remaining 2 on transfer?
Im looking to make things easy for the kids and not have them with an unexpected bill when the parents are gone.
Any suggestions would be welcome.
Also mods if this will get more responses in another forum please feel free to move.
Thank you

ct5amr2ig1nfhp

I suggest you get proper legal advice.

There are not enough details in your post, so I have to assume some details.
Do you have five children by the way, it is not clear in your post? What is the current approx value of your property?

One example scenario - parents pass away, one of the siblings living in the house, they decide to move in the gf/wife, have a couple of kids. How do the other siblings extract their share of the inheritance?

studdlymurphy

Sean Big Prawn wrote:

One example scenario - parents pass away, one of the siblings living in the house, they decide to move in the gf/wife, have a couple of kids. How do the other siblings extract their share of the inheritance?

3 kids. I suppose in your scenario the other two would force the house for sale so its either sold to the public or they are bought out.

Also we could either will it to all three of just 1 depending on circumstances meaning it would be split 3 ways or else one kid would own 3/5ths and could buy the others out or they could gift theirs.

Are these pie in the sky ideas or are they workable?

homer911

You need professional Tax/Family Law advice

SteM

You don't just need legal advice you need the think very carefully about the effect it could have on your family in years to come.

studdlymurphy wrote: »

3 kids. I suppose in your scenario the other two would force the house for sale so its either sold to the public or they are bought out.

Also we could either will it to all three of just 1 depending on circumstances meaning it would be split 3 ways or else one kid would own 3/5ths and could buy the others out or they could gift theirs.

Are these pie in the sky ideas or are they workable?

Imagine something like this happening down the line, it could cause a rift between the siblings that would take years to heal. No matter how tight families seem they tend to loose the run of themselves when property is involved.

Peregrinus

There's an obvious risk that dealing with the house - sale, mortgage, anything - may be difficult or impossible while any one of the five owners is a minor.

There's also a problem if the family fall out, which, you know, happens quite a bit with families.

It's one thing for a house to be co-owned by a conjugal couple, who expect to live together indefinitely (or accept that it is reasonable that they should sell the house if they part). It's quite another to have it co-owned by parents and their children who expect to grow up and move out, and who find as young adults that the great bulk of their wealth is tied up in a house that they don't want to live in, but can't sell, mortgage or rent out.

It's a really, really bad mistake to allow your transactions to be excessively distorted by tax considerations. If you wouldn't otherwise give the minor children a share in the house, doing so because it will reduce the tax bill is probably unwise. It also reduces substantially the utility of the gift to the recipients.