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The way we live now
Suzanne Alston looks at the legal issues concerning multigenerational living arrangements, and the co-ownership of property as a possible solution to care provision
The growth in property prices and shortage of housing stock have had a profound cultural impact on the aspirations of families. Long gone are the
days in the 1950s when a solid Victorian terraced house in a county town could be bought for £2,000 by a young professional on a salary of £2,000. Similarly, in the mid 1980s the same house could be bought for £30,000 by a young professional on a salary of £12,000 with a mortgage of 2.5 times her salary. Now, a newbuild 2 bedroomed house in the same town could well cost £275,000 and be 13 times a young person’s salary of £21,000. This has made a deep
impression on the way we live now.
1. Multigenerational living arrangements
Many young families find it impossible to make ends meet with the double whammy of housing costs and professional childcare. As a result, some have decided to share the family home with grandparents.
There are perceived benefits all round: the younger generation hope to save the deposit for a house and benefit from childcare given by the grandparents. The grandparents want to be a part of their grandchildren’s lives. They also hope
that their child will look after them at home in their old age.
What are the legal implications? Where there is only one child, while the running costs can be agreed informally, capital considerations need careful thought. If the grandparents want to make a gift of a share of the house, that can work for Inheritance Tax purposes. However, if there is a reasonable possibility that the younger generation might move out, the tax benefits will be undone.
What if the younger generation get divorced? The child’s share will fall into the matrimonial pot for division between the parties, and the
 Legal Advice

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