tenants in common is it a good idea?

Question

have property but no cash 2 children struggling to get a home! would like to pass house to them eventually

Answer 1

I have no idea what you are trying to ask.

Answer 2

So are you proposing that the children become tenants in common with you or that they are the tenants in common and you continue to live there until you move out to the big house in the sky?

Tenants in common is a good idea where there is to be an unequal split of the proceeds of any house sale, such as if you were to sell and retain 50% and the kids 25% each. Each of you would also need some sort of will drawn up to ensure that your share of the property is disposed of as you wish on your death as your part will not necessarily pass in equal amounts to each child.

If you were to become joint tenants then the situation is slightly different as the rules of survivorship would apply in which case your share would automatically pass in equal proportions to the remaining joint tenants. However, joint tenants are jointly and severally liable for repayment of any mortgage so if one defaults on their payments, the others have to cover the amount or face repossession.

If you are thinking of transferring the property into their names lock, stock and barrel, consideration would have to be given as to how they are to pay for a mortgage, if there is still one, who pays what, what happens if one of them can't pay and what happens if one of them wants to sell, such as if they marry and want to buy a house of their own. This would leave you in a predicament. If the house is currently wholly owned by you and you want to transfer it into their names, I believe that inheritance tax still applies for any transfers if they are made within seven years of your death. Only after that time are they considered a gift.

I'm not 100% sure on the last points and it is probably better to speak to a fully qualified solicitor as property law is an absolute minefield and it's best to speak to one who knows. Try looking on Community Legal Services Direct website, cls-direct.co.uk, for a list of all local lawyers to you.