House Sale

[londondave]

My friend has recently inherited a house which he wants nothing to do with due to painful childhood memories! It is valued at �199k but he wants rid of it lock stock and barell for around �100k so it sells quick without him having to even enter the house again but he has been told this would be illegal! Why? if it is his house he can sell it for the amount he wishes.

[andy hughes]

The 'illegality' may connected to the terms of the will in which the property was bequethed to your friend. He needsd to seek advice from the solicitors handling the will and the disposal of the estate, to find out more information.

[vittoria]

There is another aspect; basically, if something is sold at so much less than its market value, unless there is a reason such as a pressing need to collect funds quickly to pay off other debts, the inland revenue smell foul play. They may think it is a way to donate something without having to pay tax on the gift (like if you donate something and then die within 7 years it attracts death duty). They may even claim that your friend has not divested himself of the whole of the property, that he retains some legal interest in the portion of the property he has not been paid for (like �99k if it's worth �199k but he sells for �100k) whereas the purchaser would have, say, legal and beneficial interest in �100k worth of house, beneficial interest only in the �99k worth. So yes, all sorts of problems could arise, like tax liabilities, ability to obtain another mortgage/loans, credit score, etc. The purchaser might have problems with his lender, too. Your friend would be better off putting the house on the market at a realistic, if bargain, price, ready to knock money off say after a month, etc. This way he can show the Inland Revenue that he merely responded to market conditions.

[Doolallygirl]

Whereabouts is this house?! I would buy it!

[Oneeyedvic]

There is no problem if this is all above board and is certainly not illegal. He must be careful about stamp duty which would be the main concern of Customs. Stamp duty would be payable at 1%, and so if everything is above board, talk to your solicitor and let him know what you are doing. If it is marketed by an estate agent and not sold to a "friend" there is not a lot customs can do, and any wrong doing will be down to the estate agents. Bear in mind that something is only worth what someone is willing to pay for it. Personally I would go along with Vittoria. Go to a local estate agent. Tell them that you want a VERY quick sale. Ask them to price it to sell with in 2 weeks. Go at that price and take offers. If it really is worth �190 then a quick sale price may be �170 and your friend should get a minimum of �140. WE sold our house to some friends at �15,000 less than what it was worth. The surveyor commented on the fact that he thought we were selling it cheap. Why would a mortgage lender be bothered? Better security for them. Myslef, I would also be willing to buy it for �100 ;-)

[londondave]

Thanks for all answers, most helpful. I wil pass them on. BTW He has a buyer (his cousin) thats why it is going complete with furniture etc for their first home

[smudge]

What a lucky cousin he has!

[FTVS]

Seems to me the cousin bit maybe the problem - maybe the "illegality" springs more from the lenders? I know that lenders do not like sales that are not at arms length.