Buying/being Gifted Land

[savethefarm]

I have piece of land which I own half of with my brother.

He would like to sell it to me. We have agreed on £60k for his half.

Because I have a low income from my job (but reasonable income from my properties) I have been denied a loan to buy it outright.

We have considered him gifting me the land and me paying him monthly amounts over the next few years.

Is this legal?

What do I need to worry about?

How can we make it "official"?

Additionally, my brother now lives in the US - does this factor in?

I assume there is a way to do private sales in this manner - any information on the subject is will be well received.

[smurfchops]

I would suggest asking a solicitor, although I am sure there are some amongst us ABers on here. But do it legally !

[savethefarm]

I am also unsure if this is the right place to ask.

Thank you in advance

[Peter Pedant]

as a non lawyer this should be OK so long as you both keep to your parts of the bargain. This was not possible in my own family and was also marked in my own family of people saying they would do X when it turned out they had no intention ever of doing X. To the extent that when one opens his mouth we look on what comes out now as meaningless blather.

Nothing illegal about is so long as you aren't doing it in order to effect something else ( like escaping tax )

I am surprised you cant get a mortgage on income from properties or secure a mortgage on properties which are let....[ because I had no difficulty]

You had better work out what you are doing to do if one side defaults on payments or the other side wants to unwind everything at a point of half way through. and in the event of death of either party. [ or divorce ]

Living in the US is irrelevant to you and the brother needs tax advice there.

The transfer would have to be done by a lawyer and I think he should draw up the contract as well.

[Peter Pedant]

er of course you have to do it legally
but I am sure we are all grateful for smurfie pointing it out

There is nothing inherently illegal in transfering land for a deferred payment.

[savethefarm]

We would like to do it legally, that is why we are asking.

I would like a general impression of what I should expect before going to a solicitor.

[smurfchops]

I would try and get recommended to a solicitor, then ring and ask how much he would charge for his advice. When you go to see him/her, make sure you are clear how much he charges if he is to draw up contracts etc. and get him to put this in writing before you use him. Sorry for being so cynical....

[Old_Geezer]

It does occur to me (not being a lawyer you understand) that one is either getting something as a gift or one is buying it (perhaps through some delayed set of payments). I can't see it qualifying as both at the same time. Assuming it is the latter, I still see no issue. Maybe it might even help with CGT issues, maybe, possibly. I await an informed post, with interest.

[savethefarm]

Hi Peter. Thanks for sharing your knowledge.

What I am partly worried about is avoiding tax by mistake. Does CGT apply to land gifted at that price?

Would the contract be called something like a contract of deferred payment?

[savethefarm]

Thanks SmurfChops and Old_Geezer.

I suppose it is being purchased, but in a delayed fashion.

[Peter Pedant]

Hi SFS - CGT doesnt affect you - you are buying

The CGT side for your brother is not possible for you to sort out - it depends on which state he is and whether they have a tax treaty with the UK and what the details are.

No you call it a contract. - a contract of sale - Oh it has to be in writing by the way. The lawyer may get excited and say it is not a contract of sale, but a contract of an agreement to sell. Just say yeah yeah whatever. You will need to agree with your brother whether title passes on the first installment or the last.

[Peter Pedant]

// then ring and ask how much he would charge for his advice. When you go to see him/her, make sure you are clear how much he charges if he is to draw up contracts //

it is not cheap and will be around £200 /hr. Remember you are instructing him. The transfer is of land and is between members of the family ( but so what ? ) and there will be staggered payments. Again this cant be the first time he has been faced with this.

go short on the advice bit - as In fact you know what you want to do.

[ToraToraTora]

He'd not be gifting it he'd be selling it privately and agreeing to installments. I'd say it's fine as long as there is no lender involved at the moment. get it drawn up as a proper agreement and if I was him I'd retain a charge on the land until the debt is repaid. Effectively he'd be giving you a mortgage.