Buying as an extended family

[Heloise]

I have a very complicated situation, which I know I'll have to seek advice on in the future and possibly take some calculated risks. My husband, son and I would like to buy a house with my mother and stepfather. My husband also has a child from a previous relationship. My stepfather has none and is like a father to us. We are wondering what would happen under french succession if my mother and I bought the house in our own names (it would be my own money). When my mother died (if before me), from what I understand 2/3 of her estate would go to my brother and I. She could freely dispose of another third. Would I be able to buy my brother out? (He would be agreeable to this) If I died first, and my portion was left to my son, would my husband have the right to remain in the house as his parent and guardian? Could I stipulate that my husband has the right to remain in the house until his death, even though it wasn't owned jointly?

I know this is quite a challenging query, and we will not rush into anything as we intend to rent for a year or two before buying a property. I just want to see what other considerations, ideas get thrown up. We'd like to try and leave a whole house for my son and use other assets to balance inheritances.

[Nick Trollope]

This is indeed a complicated situation! One for which an answer cannot be forthcoming without alot more information - eg. If the house is (and will remain) a secondary property, then French inheritance rules will not apply. etc etc.

The only advice you should take is from a Notaire (in France) - this is exactly their field of expertise. Added to which, if you use the same Notaire as handles the purchase, then the on-cost will be sensible. Ask him/her about an SCI.

 

[Will]

I agree with Nick, your situation is very complicated, and French succession law notoriously inflexible, so you need advice from a qualified professional in French law (notaire or advocat) in order to find the best solution for your circumstances, though it may not be possible to do exactly what you want. On the face of it, an SCI (societe civile immobilere- a private property owning company) would seem to be an answer, but these are not always suitable if you actually live full-time in France, and they can have adverse tax implications.

[Heloise]

Yes, the property would be our primary residence. The present situation is that my husband, 10 month son and I are moving to France in August. My husband has a job and we have a house to rent. Then if all is well and the job ok etc, my parents would like to move out to join us the following year. I don't think any of us would remain as UK domiciled as we'd give up all UK assets. This has been a long term plan and it seemed much simpler until we had a baby! Then my husband and I would have just bought the house and my parents would have lived with us (they are happy to take that risk).

The problem is that we think that the future may be very different for our son and that we'd like to leave him a place to live that is set up to be as sustainable as possible. I suppose I could buy the house in my name, but then the risk is anything happening to me and how well we've brought our son up. Can you jointly own a property with someone who is not your husband, ie. my mother, without setting up an SCI?

[Will]

You really do need to take professional advice on this and not rely on unqualified advice from a forum.

Yes, you can buy a property in any name, solely or with somebody else. But, when the time comes, if a faceless French official decides that the reason for buying it that way was to avoid inheritance or capital gains tax, or any other aspect of property or succession law, then there is still a big risk that estate will be taxed anyway. In any case it is difficult, if not impossible, for married couples to be regarded as separate individuals for tax purposes - and indeed it is usually advantageous to be regarded as married. The benefits of an SCI are rather limited if you are French tax resident, though it can still prove to be the best vehicle in joint ownership circumstances.

 

[Heloise]

Thanks Will and Nick. Yes I will seek professional advice, as to an extent we are trying to avoid French succession (as with our family situation the house could be split into a myriad of pieces)- although not the taxes, either there or in the UK. For my part the money will be completely mine, not my husband's so I hope we can be regarded as separate with regard to the property. I was hoping there were some people who've bought with parents or in laws etc, so I could have some ideas before we set off to France. I didn't want to go to a notaire with a complete blank and not understand any of the options he may put forward.